Boom issue 19 by Boom Magazine

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m a r k e t

issue 19

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Is It Time for Your Annual Mortgage Check-Up Your mortgage, like your physical health, needs to be checked up on a regular basis. If not, you may find yourself forgetting about your mortgage until the bank calls you for a renewal. In this article you will learn when it is a good time to check on your mortgage. The article will provide good questions to ask in regards to your mortgage and explain why those questions are important for your financial health.

Saskatoon: A Rising Canadian City Saskatchewan has been proving to be a valuable place for investment. An important part to investing, however, is knowing the different types of investment vehicles and when to use each of them. In this article, you will learn about the different types of real estate investment and how each can be advantageous in several scenarios.

St. Albert: A Top Canadian Investment City

Big cities have typically been given the spotlight, but it is time to realize the potential benefits of investing in an up-and-coming town: St. Albert. This article will provide you with research and analysis on why St. Albert makes a valuable investment city in Canada. It will take a look at four economic indicators and examine St. Albert on each basis.

Want to Get Rich? 4 Rules for Building Wealth

Everyone wants to get rich, but it is important to learn the proper tools to reach wealth. This article will teach you four rules to follow when building wealth and show you how real estate is a good investment tool to achieve your goals.

3 Reasons Rent-to-Own Can Stink While rent-to-own may seem like a good option for making money with real estate, it also has its downsides. In this article, Julie Broad will share her personal experiences with rentto-own properties. She will provide three major reasons why rent-to-own may not be as advantageous as people may think.

about BOOM Magazine BOOM Magazine is all about property investment. When this magazine was conceived, the market lacked some real content relating directly to property investment. It seemed like just about every realtor could contribute an article about selling your home, and it would be in blogs and magazines all over the place. BOOM Magazine was created for the property investor, by the property investor. Each month, you will see contributions from professionals in the market as they share their experience in the field. Within BOOM Magazine, you can expect the very best of our market - whether it relates to property investment, financing and leveraging or the different asset types, BOOM Magazine will be sure to have it as an editorial. Would you like to contribute to BOOM Magazine? Email editor@bestofourmarket.com and weâ&#x20AC;&#x2122;ll talk. Would you like to influence the direction of the magazine? Register to subscribe and vote on the polls on what type of articles you would like to see more of.

contributors Sylvia Sigurdson

Susan Mallin

For over 14 years, Sylvia has been assisting people with their mortgage needs, originally as a licensed realtor and now as an Accredited Mortgage Professional (AMP) at Mortgage Depot in Victoria, BC since 2004. She has specialized in helping her clients acquire investment real estate as part of a wealth-building strategy and excels at structuring mortgages with the greatest tax advantage in mind.

Based out of Toronto, Susan Mallin, CIM, CFP is in charge of the Financial Planning Division of Goodreid Investment Counsel. Her clients’ needs typically range from basic retirement planning, to the more complex cross border planning strategies. She looks at her role in financial planning as the centre of the financial puzzle to help find the missing pieces needed to make the plan complete. Often this means connecting and coordinating with other professionals such as lawyers, or accountants to help fulfill the entire needs of the client.

For more info, please visit: www.mortgagecanada.com

Julie Broad Julie Broad has been investing in residential real estate for over a decade across Canada. She’s a featured keynote speaker and an award winning real estate blogger with a passion for helping others transform their financial future with real estate investing. For more info, please visit: www.revnyou.com

Vivian Wu Vivian is a passionate real estate blogger who specializes in housing market in Canada. She has had much success educating the masses on the Alberta real estate market, specializing in real estate investment. Her main area of expertise involves analyzing economic fundamentals of various investment locations, such as population trends, job growth, gentrification, and area development. Vivian is a graduate of the Beedie School of Business at SFU. Connect with her at: vivian@viproperties.com

Connect with her at: 1-888-466-3734 smallin@goodreid.com

Kari Calder

Kari Calder has been the top female agent at Century 21 Fusion in Saskatoon for several years. Real estate is Kari’s passion and she is dedicated to her clients and has helped close to 400 people buy or sell real estate in Saskatoon. She is also 1 of only 3 agents out of 600+ to be a member of Trusted Saskatoon which means she upholds a standard for quality service. Connect with her at: kari@saskatoonrealestate.net

Is It Time for Your Annual Morgage Checkup?

Your mortgage, like your physical health, needs to be checked up on a regular basis. If not, you may find yourself forgetting about your mortgage until the bank calls you for a renewal. In this article you will learn when it is a good time to check on your mortgage. The article will provide good questions to ask in regards to your mortgage and explain why those questions are important for your financial health.

Is It Time For Your Annual Mortgage Checkup? By: Sylvia Sigurdson After signing mortgage documents, many of you forget about it until you receive a call from your broker or a letter from your bank saying your mortgage is coming up for renewalfive years later. Like your physical health,your financial health needs regular attention. In fact, many believe the connection between the two is undeniable. You may not go see your doctor once a year (neither do I), butif you could call your doctor up and say, “I’m wondering if I can do anything to improve my general health. Any suggestions?”that’s a call most people would be happy to make. That’s exactly what I would recommend for your mortgages. Call your mortgage broker or banker and ask if there’s anything that can be done to improve your current financing. Ideally, they’ll welcome the opportunity to sit down with you and help tweak things where possible. If they’re not, consider getting a second opinion from someone who is willing. Here are a few questions to ask: 1) What are the current rates and would it make financial sense to refinance at this time? Most people are surprised to learn that even when there is a very large payout penalty with their current mortgage, paying the penalty can still save them thousands of dollars because of lower interest rates. When there are less than two years left on your term, the interest savings can be significant. If it does make sense to refinance, it’s the perfect time to look at all aspects of how the mortgage is structured and modify things at the same time. 2) Could you review how I currently have things structured to see if there is any room for improvement?

When you own more than one property, there are many things that can be done to change your mortgage structure to save you money and simplify things at tax time. For example, whenever possible, I use a multi-level mortgage product that allows you to separate your non-deductible mortgage (principal residence) from your deductible mortgage interest. 3) I have a variable-rate mortgage. Is this a good time to lock in? I have a fixed-rate mortgage. Is this a good time to refinance into a variable? The answer to the question, “Should I be in a variable or fixed-rate mortgage” changes constantly. At this moment, when fixed rates are less than a quarter percent higher than the current variable rates, it would be hard to convince me that it makes sense to go variable. But if you still have two years left on a variable at Prime - .85% (2.15%) that makes a very good argument. When rates are dropping it’s a much better time to go variable. But when they’re this low, going fixed makes the more sense. 4) Can I access any of my equity so that I can purchase more investment property,do renos/repairs or consolidate debt? If you or your tenants have been paying down your mortgage for a few years, or if the market values have gone up since you purchased you may have access to equity in one or more of your properties. When doing an equity-take-out it’s the ideal time to review your entire portfolio and investment plan. If you want to purchase more investment property, then this is the best way to proceed. If you’re carrying credit card debt, or an LOC balance, paying them off would improve cash flow, or increase your monthly mortgage payment with the money you’re saving every month. That way, you’re not just

stretching out your credit card debt but actually saving with a much lower interest rate and paying off your mortgage more quickly. Being able to leverage the equity in your properties plays an important role in successful investing. 5) I want to pay off my mortgage(s) faster. What are some things I can do to make that happen? Mortgage payments are what determine amortization length. The higher the payment, the lower the amortization, and the lower the payment, the longer it takes to pay it off –simple. There is, however, a strategy to changing payments/amortizations. It may be worth looking at extending the amortizations on your revenue properties and reducing the amortization on your residence whenever possible. The rule of thumb is to pay as little down on your deductible debt (longer amortization) and any extra, pay down on your nondeductible debt (shorter amortization/lump-sum payments, etc.) And the more you pay down on your nondeductible mortgage, the more you can convert into tax deductible debt by borrowing it back and investing in more property. If you’re not sure of the answers to any of these questions, an annual mortgage checkup might be just what the doctor ordered.

Saskatoon: A Rising Canadian City By: Kari Calder Some people consider investing in real estate as • Cash flow – This is the type of investment for peoonly flipping houses or buying rental properties, but ple who would like to supplement their incomes in actuality any real estate you own is an investment by getting more rent than the investment costs on – even your own house. People decide to invest in a monthly basis. These types of investments can be all sorts of things, but there is no investment in the hard to find, but even if they are netting a zero to world larger than real estate. begin with once the mortgage gets paid down and rent levels increase over time you should, in theory, We have seen ups and downs in the global real essee a positive cash flow down the road. tate market and this is no different than any other investment. The main difference between real es- • Equity growth – This type of investment you are tate investments and all other types of investments mostly using the rental income to help subsidize the is that people will always have a need to live in a mortgage payment. home and/or buy and sell real estate. • Fixing and flipping – This type of investment is One of the major considerations about the Saskagenerally only beneficial if you are able to do a lot toon real estate market is that the vacancy rate for of the work yourself as if you are paying a contracrental properties is very low and our city is growtor the earning potential drops. When investing in ing at an unprecedented rate which puts demand on a fix and flip type property you will want to ensure housing. The vacancy rates have been low here for that you are not locked into a mortgage as the paymany years so investing in revenue homes or conout penalties can be extremely counterproductive. dos is generally a safe investment, as long as you aren’t necessarily looking for a huge positive cash- • Real Estate Investment Groups – This type of inflow each month. vestment usually involves a smaller investment with more people and also involves someone to manage • Some of the different types of investment trains these investments. One advantage of this type of inof thought are: vestment is minimal income loss if a unit is vacant for a month but it also generally nets less financial • Home ownership – Many people don’t consider gain as it is a smaller and often safer investment. home ownership as an investment, yet it most certainly is. • Buy Below Market – This is the most ideal sort of real estate investment but also very difficult to im• Single family rental – Many real estate investors possible in an already strong real estate market such start with this as they keep their own home when as Saskatoon. This type of investment can involve a move is required to either another location or a taking a chance in a market that others aren’t yet need for a larger home. This can usually be done comfortable in taking a risk in. This type of investwithout a property manager. ment can also be good for investors with a keen sight for upward and downward trends as every market • Multi-family rental – This can involve the need will eventually recover from large drops in value so to manage many people so it can be a lot more this investor relies on timing and being able to wait overwhelming than single family rentals. Most the trend out. first time investors don’t start here as it can be a learning curve. Like many other areas we experienced a lot of ‘spec buyers’ in 2007 which drove the Saskatoon real estate

market upwards and, like many other markets, we saw these investors pulling out of the market in 2008-2009 which meant a higher number of listings, therefore a decrease in home prices. In the years that followed, we have had a moderate year-over-year increase in the average home sale price in Saskatoon and this is driven by our economy – not speculation. The Saskatchewan economy is becoming known world-wide so if you ask “Why would someone invest in Saskatchewan?” my answer would be “Why not?” Kari Calder is a real estate expert and the top female agent at Century 21 Fusion in Saskatoon. For more questions on investing in Saskatoon, please reach her at kari@saskatoonrealestate.net.

St. Albert: A Top Canadian Investment City Big cities have typically been given the spotlight, but it is time to realize the potential benefits of investing in an up-and-coming town: St. Albert. This article will provide you with research and analysis on why St. Albert makes a valuable investment city in Canada. It will take a look at four economic indicators and examine St. Albert on each basis.

St. Albert: A Top Canadian Investment City By: Vivian Wu When it comes to real estate investing, I highly recommend small booming cities. Don’t get blinded by the glitz and glam of big cities like Vancouver and Toronto; those are the locations that should be avoided – atleast for now. Here’s the problem: it requires a lot of research to find the perfect investment location and that is why in this article, we will go over what makes St. Albert, Edmonton a hot investment city. Generally, I do my research based on a city’s economic indicators—these are signs that point to a growing economy. Some basic economic indicators are: population growth, employment growth, favourable policies and infrastructure development. The key here is to catch onto these signs and invest early in the growth cycle. For example, I like to compare St. Albert to West Vancouver 10-15 years ago: affluent, booming and developing. West Vancouver has now become unaffordable to many, but people who recognized the area’s potential 10-15 years ago have caught onto the key economic indicators at that time and purchased or invested early in the growth cycle and have most likely received a fruitful return. Now, let’s dissect the city of St. Albert so you can see why it is number 1on my “Canadian Investment Cities” list. St. Alert is located in the Greater Edmonton Region, so naturally it benefits from the ripple effect of Edmonton’s strong economic growth, high employment and increasing prosperity. Being the world centre for the oil, gas and petrochemical industries, Edmonton continues to surpass Alberta and Canada in terms of job creation and labour force growth (Source: The City of Edmonton, 2013). 1.

Population Growth

According to the 2011 census, St. Albert had a population of 61,466, a 6.5% population increase from 2006, which was ahead of the national average of 5.9%. The overall population of the city is expected

to double in the next 10 years. Moreover, St. Albert is ranked the #1 Top Canadian Place to Raise a Family by Today’s Parent Magazine and #5 Best Place to Live in Canada by Money-sense Magazine. 2.

Employment Growth

Currently, St. Albert is going through some aggressive development both residentially and commercially. This will help create job and boost employment growth. Due to the city’s strategic location and strong transportation, the city continues to attract businesses and skilled workers to the city. With large retailers such as Target and Costco moving in, not only will more jobs be created, but also residential development. According to Statistics Canada 2013, St. Albert’s healthy job market is reflected by its low unemployment rate of 3.8%, compared to 4.7% in the Edmonton Capital Region and the national rate at 7.2%. 3.

Favourable Policies

Another benefit St. Albert enjoys from being in Edmonton is its business friendly, favourable policies. First of all, there are no sales tax (PST), provincial capital taxes, payroll taxes…etc. On top of that, the capital has the lowest business and personal taxes in Canada as well as the lowest property taxes in the region. 4.

Infrastructure Development

St. Albert is located right next to Anthony Henday Highway, a ring road highway around Edmonton that allows St. Albert residents to get to the Edmonton core in just 10-15 minutes. Provided the 4 key economic indicators we have gone over so far, it’s easy for investors to see the positive overall rental outlook in the future ahead

for St. Albert. With positive employment growth, St. Albert will continue to attract skilled workers to the region, which in turn increases population. This will lead to a jump in housing demand and this will lower vacancies and push up average rents. Favourable policies will also bring benefits to real estate investments in the area. On top of the 4 key economic indicators, Edmonton’s overall growth helps benefit St. Albert’s rental market as well. The city is recently ranked number 7 on Financial Post’s “Where to Buy” list and REIN Canada’s number 5 Top Investment Town in Alberta.

Want to Get Rich?: 4 Rules for Building Wealth Everyone wants to get rich, but it is important to learn the proper tools to reach wealth. This article will teach you four rules to follow when building wealth and show you how real estate is a good investment tool to achieve your goals.

Want to Get Rich?: 4 Rules for Building Wealth By: Susan Mallin There are many different types of investments a person can make in the hopes of generating an excellent return: art, precious stones, antique cars, and even fine wine. More commonly, people are investing in public company’s shares or bonds. One of the best investments, however, is real estate. It is a great hedge against inflation, is an income generator, and in some cases (such as a primary residence) it can be sold without incurring capital gains taxes. Many people, like Donald Trump, made their fortune in real estate – butlet’s not forget a few of The Donald’s companieshad to filefor bankruptcy protection. With any investment, setbacks are bound to occur as the economy moves through its cycles. The more concentrated your investments are in any one sector, the harder the hit during an unfavourable economic cycle. In order to build wealth over time, while breezing through the ups and downs of economic cycles, there are 4 rules to employ simultaneously for the best long term results: 1) Protect against Inflation Real estate, for one, is a good inflation protector. Typically, as inflation rises, so do rental costs. If you are living in your home, each mortgage payment made can be looked at as your own declining rent payment (instead of inflationary). As time moves forward, each portion of interest paid becomes smaller and smaller until paid off. This protection becomes even better if you have a low interest long-term fixed mortgage rate while inflation rises. If you are considering owning rental property, rent can be increased to keep pace with inflation. If the rental market is tight, keep lease terms short so that rent increases can occur more frequently.

2) Generate investment income Generating income can be accomplished by renting a portion of your house, or having multi-units to rent; however, an easy way to generate income from real estate is by investing in Real Estate Income Trust units (REITs) in an investment portfolio. In fact, this accomplishes 2 out of our 4 rules concurrently. It generates income and is very liquid – so much so, that it can be sold and settled within 3 business days. Income from investments provides diversification opportunities (through reinvestment into other assets) and allows one to realize a portion of their overall return periodically. Most investors have some of their money in various REITs and those who are renters, should have a higher weighting to offset their personal exposure to rent increases caused by inflation. 3) Have liquidity when you need it Liquidity is crucial to protect against setbacks. Real estate held in physical forms, such as houses or commercial property, can become extremely difficult to sell when the housing cycle turns down. However, if you re-invested the income generated into other assets such as shares of public companies, government bonds, and commodities (to name a few), liquidity concerns are lessened if cash is needed since there is more than one asset class available. 4) Use leverage sensibly Leverage can be a dangerous thing if overdone, especially when cycles turn. But it can also enhance returns when the opposite is true, obviously. The most danger occurs when too much debt is taken on.Even large publically traded companies (or

countries) can be felled when they can’t manage their debt. If all your money is being used to pay debt each month, you can’t be following rules 1,2, and 3 and therefore, your risk situation is heightened. An investment strategy following the four rules will help preserve purchasing power during inflationary times, generate extra income to be used to diversify into other asset types (further lessening overall risks), and provide easy liquidity when needed. By following the first 3 rules, it forces one to keep debt levels manageable, thus automatically adhering to rule number 4. In many ways, it’s like “multi-tasking” your money. Often I see people who compartmentalize their investment strategy with a “one thing at a time approach”, such as paying off a mortgage before starting an RRSP or other investment savings. People caught in that type ofstrategy, often end up having to re-mortgage their house laterbecause they run out of liquidity – defeating the purpose. Susan Mallin is a Certified Financial Planner and Associate Portfolio Manager with Goodreid Investment Counsel. She provides services for high net worth individuals, but also has a separate service specifically tailored for the younger generation living across Canada to help them with financial planning and investing for their future. www.susanmallin.com

Three Reasons Rent-to-Own Can Stink

While rent-to-own may seem like a good option for making money with real estate, it also has its downsides. In this article, Julie Broad will share her personal experiences with rent-to-own properties. She will provide three major reasons why rent-to-own may not be as advantageous as people may think.

Three Reasons Rent-to-Own Can Stink By: Julie Broad I’m not being dramatic when I say rent-to-own deals can be really crappy. I’m not against them. My husband and I still do rent-to-owns. We’ve done a lot of them in the last four years. We have a training program to help our coaching clients learn how to do rent-to-owns. However, I am against the fact that I hear nothing but great things about rent-to-own deals in the education sphere, when the reality is that there are some things you should understand before you dive in. There are some really lousy things about rent-toown deals, even when you do everything right. Rent-to-own is when a tenant rents your property with the option to purchase it. You set their purchase price at the beginning; they pay a fee (which can become part of their down payment) for the option to purchase it in the future, and a portion of their rent is a credit that builds up over time towards their purchase. There are two approaches to rent-to-own: tenantfirst and property first.Both approaches generate more cash flow because the tenants are paying a higher than market rent for their property in exchange for credits that build up towards their purchase, and they are responsible for basic maintenance. Also, you typically don’t need property management because of the quality of tenants that move in and because they are responsible for taking care of repairs up to a certain dollar amount. When I quit my job, we evaluated all of the options for cash today: wholesaling, flipping, becoming a realtor, and property management. Wholesaling requires constant marketing and funnel management. If you’re not constantly finding sellers and buyers, you aren’t making money. Flipping is stressful and higher risk. It also requires you to be consistently working on a flip or you won’t be fill-

ing your cash needs. We felt being a realtor would reduce the focus from our own deals and since we were planning to do a deal every month or so, we knew we’d need a lot of focus for that. Finally, property management is not something we really enjoy, so we didn’t want to create a business around it. That left us with rent-to-own as the best solution for us. By changing a few of our existing rentals to rentto-own, and adding just a handful of rent-to-own properties to our portfolio, we were able to boost our cash – with the option fees and the increased cash flow – to a point where we were comfortable financially from our real estate holdings. We also liked the fact that rent-to-own helps good people get into home ownership. Our rent-to-own tenants give us big warm hugs, invite us for dinner, make us handmade thank you cards, and invest in fixing up the homes. We like rent-to-own because if we want to take a month off from working on our deals, we still make money. We can’t say that about any of the other strategies I noted above. Rent-to-own, however, is not a perfect strategy, and I’m not a huge advocate anymore. When we started doing them, I was excited. I loved that we were helping people and making a great income doing it. Four years later, I like it as an exit strategy. It’s a great tool for your tool box, but I don’t think it’s a great business model. If you only do rent-to-owns right now, you will want to read this carefully. Maybe it’s working today, but it has some serious challenges. Let me explain why:

in a very hot market, you will end up selling your property for quite a bit less than you could have made, had you sold it on the market normally. On the other hand, in a market that is flat or heading downwards, pricing a rent-to-own in a way that is fair to a tenant and that will still make you money is extremely difficult. Even if the market in your area is doing okay, if the overall economic sentiment is poor, people will have a hard time believing the house will be worth the same as it is today, let alone slightly more when you sell it to them in 1, 2 or 3 years.

1) You can’t always do rent-to-owns.

If rent-to-own is your only strategy in your business, what are you going to do when the market is not good for doing rent-to-own? What are you going to do if your cash flow suddenly drops dramatically because of a market shift that makes new rentto-owns difficult and existing ones fail?

The market conditions have to be right. If you are

2) It really sucks when someone walks away

from $15,000 or more! If you’re a sensitive person who cares about other people, you’ll never find comfort in the fact that you still make a good profit when a rent-to-own fails. There’s nothing to celebrate when a family leaves hard earned money behind, even when you’ve done everything in your power to make it work. Our first failed rent-to-own weighed so heavily on us. It was a couple that Iwas sure were going to purchase their rent-to-own home from us. They were pretty much the ideal rent-to-own tenants – orso I thought. Less than a year into it, they walked away from $18,000 in deposit and credits. We tried everything to work with them, but their minds were made up. It made absolutely no sense to us why they walked away. We still don’t understand and it weighed on us. Eventually we came to terms with the fact that we’d

done everything we could do to make it work and the tenants understood the contract and still chose to walk. But, coming to terms with something is very different than actually feeling good about it. The market has softened where we invest and we’ve had more people walk (from their rent-to-own…and all their credits) in the last twelve months than we’ve had close on their deals. It gets a little easier to swallow, but it never feels good. It also makes it harder and harder to want to do more. I’m less excited about the prospect of helping people with a rent-to-own, because I am starting to see that no matter what we do, we’re only going to help half the people we work with. Plus, while we explain the potential of a failed sale to our investment partners and we always have a plan B of being able to rent it out as a regular rental if we need to, it still feels like we’ve failed our partners when the deal doesn’t go through. They expected to have their investment capital returned to them in 2 years and that doesn’t happen if the tenants walk. Most of our partners understand and realize their return remains strong despite the failed rent-to-own, but some of our partners are really disappointed when the property doesn’t turn over. Disappointing someone feels terrible too. 3) There’s minimal wealth creation in rent-toown.

I’ve grown tired of the churn required to run a rent-to-own business. We did a deal every month because we had to keep the deals coming in order to continue to fund our business and make up for the cash flow we lost when one would sell. It’s tiring. I love collecting houses. I am a fan ofbuilding wealth and knowing my financial future is secure because I have a monopoly board full of little green houses. With rent-to-own, we’ve bought some really great houses that we no longer own. It was so much work to find those great deals, fix them up, find and educate the tenants, only to sell the property before we really realized all the financial benefits. I am thrilled I helped some really great people buy a wonderful home in a great area, but now I can only drive by and say “I used to own that house.” I am grateful for the cash flow that rent-to-owns give us. It also allowed us to transition from my salary to our real estate business in a much shorter time frame and with fewer properties than a buy and hold strategy ever would have. I’m not against rent-to-own – I am sure we’ll use it again when we’re ready to exit from a property – but I am not going to pretend it’s the greatest business model, because I don’t think it is. I think it’s an important tool for your real estate investing tool box. I think it can be a great way to sell a property, help a family and give your business a little more cash flow, but I just don’t think it should be the only thing you do as an investor.

Rent-to-own adds cash flow to your business, it’s a great way to sell a home without a sales commission and it can generate a solid return for a money partner, but you aren’t getting wealthy. I love buy-and-hold Author: Julie Broad www.revnyou.com/ real estate because you make money with mortgage pay down, cash flow, and appreciation. You also enjoy great tax benefits. With rent-to-own you make money mostly from cash flow. The appreciation in the property largely goes straight to the tenant as you credit their rent and recover their deposit when you sell. The mortgage pay down is always minimal at the start of a mortgage, so you never really get much benefit from that. The tax benefits are also reduced by the fact that rent-to-own is considered an active business and not taxed the same as regular rentals (which is usually taxed as a Capital Gain/Loss when you sell).