Quote:
Originally Posted by Aarongavey
I don’t think there is an American equivalent of a RCA though (in terms of how much you can put in the tax deferral account). If you are doing tax planning for an individual who is going to make 99% of their income before age 35 and expects to live to their 80’s and needs to retain a certain lifestyle for the 45+ years they are not making good money it is a pretty good vehicle. If you make 50 million Canadian, you could amortize that to 600K Canadian a year over 60 years you could get your income tax down to about 40% a year, which would be comparable with US jurisdictions (assuming they do not have a similar vehicle to a RCA).
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Yeah it’s a good solution for these situations, no question. It’s undoubtedly a good idea for professional athletes because they aren’t always planning for their future after sports, which this also solves. If anything, a lower tax regime, like Alberta, makes these scenarios work a lot better than other places where the tax burden is higher.