t5 slip

[cyryz]

Hello Everyone,
I found an investment company that has been paying 17.5% interest per month for the past 8 months. I have never cashed in and just kept the money rolling over every month. They said that they will be issuing T5 slips soon. What does this mean? Does this mean that i have to pay taxes on money that i have not actually received? I am unable to pull any money out of this company for the next 6 months. The total amount of interest that i have made is HUGE and i will not be able to afford to pay taxes on this amount. I thought that you dont pay taxes unless you actually receive money... is this wrong or am i literally screwed?

[asdfvcx]

is this wrong or am i literally screwed?
Well, it doesn't really matter. Because assuming that you aren't spamming this board, you're never going to see any money. Any investment like this is a scam, and you probably have lost all of your money.

[cyryz]

well... i am not spamming and will never divulge the name of the company invested in and im confident that i will get my money as friends of mine have all got their money. but your answer doesnt answer my questions!!

[HBP]

well... i am not spamming and will never divulge the name of the company invested in and im confident that i will get my money as friends of mine have all got their money. but your answer doesnt answer my questions!!

You will have to pay taxes on the interest earned.

[TheDude79]

If you've earned interest that was "rolled into" further investment in your mystery vehicle, you'll have to pay tax on it. Just because you don't have the cash in hand that doesn't mean that you're free from tax, there's no 'deemed disposition' type action like there are for capital gains. Interest is also taxed as straight income, not at a discount like dividends or capital gains. In essence, you're screwed, time to go beg for a loan from the bank or from your local organized crime syndicate.

Anyways, shouldn't all of your friends who have been involved in this investment be able to help you out on this one?

[cyryz]

Hey everyone, thanx for your replies... i guess its time to knock on friends doors!!!

[dux]

Hey everyone, thanx for your replies... i guess its time to knock on friends doors!!!


Might want to bring a 2x4 when you knock on his door :cheesygri

[Jucius Maximus]

well... i am not spamming and will never divulge the name of the company invested in and im confident that i will get my money as friends of mine have all got their money. but your answer doesnt answer my questions!!

That is common with these scams. They pay off a few people with the money that a lot of people contribute. This is how they convince more people to sign up. It is a pyramid scheme.

Good luck trying to get your money out. They won't let you. Chances are high that you will lose it.

[monty613]

Get your money out now or you'll lose it.

Mark this post.

[Thalo]

Is it 17.5% interest annually paid monthly or is it actually 17.5% interest per month (210% per year)? If it's the latter, it is most definitely a scam. If it's the former, it might not be a scam but anyone who borrows from investors at 17.5% is a very, very high risk borrower and you might lose everything just because of the inherent risk (which I'm sure they did not make you aware of) of the investment. Since you're in Calgary, I have an idea of they type of investment you're probably in, as I hear their ads on the radio all the time.

So yeah, you could be royally screwed if you have to pay tax on interest now, that you'll never see and then lose everything. Essentially pay full marginal rate now, offset it later with a capital loss at half marginal rate.

[xlfe]

what you should do is take out how much you put in.
so then the interest u continue to make will still build up and u don't really lose anything.

[cyryz]

Thanx for everyones replies!!! The return rate was 17.5% per month... i know, it sounds way to good to be true. However, i am 99% sure that this is not a scam as the guy running the show is a friend of a friend and is a well known investor that started his own company and needed initial investors a while back. So my concern wasnt IF i was to ever get paid, it was WHETHER i had to pay taxes on the interest now or later and i thank those that replied that answered my questions. I do ask though that nobody PM me to get the name of the company that i am dealing with. This was my risk that i was willing to take and dont need the risk that others are willing to take upon my shoulders!!!

[xlfe]

you know

you could have just asked what is a T5 slip and avoid all the need for secrecy...
unless you wanted everyone's opinion on the company.

[PurpleTiger]

Lookup Ponzi Scheme (http://en.wikipedia.org/wiki/Ponzi_scheme).

[illusion81]

Lookup Ponzi Scheme (http://en.wikipedia.org/wiki/Ponzi_scheme).


+1

Wave ba bye to that money lol. Some people...

[dux]

I will be cautious if anybody offers me 10% per year return, let along 17.5% per month :|

[Thalo]

Lookup Ponzi Scheme (http://en.wikipedia.org/wiki/Ponzi_scheme).

Maybe the OP is a principal in the whole scheme?

Seriously, 17.5% interest per month is not an investment, it's a scam, and probably you're in on it. You haven't told us what the person running this scheme actually does to make the return that he uses to pay the investors, and I can respect that, but what could he possibly be doing to generate such a ridiculous rate of return? The most profitable companies in the world can't take $1000 and turn it into $2100 the next year on a consistent basis. Real estate prices in Calgary during the boom over the past 5 years haven't even yielded a return anywhere close to that.

[taile77]

Hello Everyone,
I found an investment company that has been paying 17.5% interest per month for the past 8 months. I have never cashed in and just kept the money rolling over every month. They said that they will be issuing T5 slips soon. What does this mean? Does this mean that i have to pay taxes on money that i have not actually received? I am unable to pull any money out of this company for the next 6 months. The total amount of interest that i have made is HUGE and i will not be able to afford to pay taxes on this amount. I thought that you dont pay taxes unless you actually receive money... is this wrong or am i literally screwed?

T5 slips are slips that a corporation issues to their investors for any dividends or interest paid by the company. You use this slip similar to how you would use a T4.

As for the taxes on the interest earned, generally, you are taxed on what have been accrued by you regardless if you have received the cash or not. Only in a few cases that your interest would not be taxed until withdrawn (ie. RRSP). In your case, it would be interest reinvested and will be taxed on all amounts reinvested. The company that you invested in will report all amounts paid and whatever was earned by you will go on the T5 slips. So I do not think that you will be escaping the big tax bill on this. There is a plus side though, if they're issuing T5's, most likely it is not a scam, just a very high risk investment, unless there is some monkey business going on.

:D This is my understanding of the tax implications with your issues and it may not be all correct. Use the information here at your own discretion.

[redkid]

so were u able to get the $?