I’m having a hard time sorting out Canadian tax policy on investment funds.

I’m in some great offshore funds, which have been growing by about 12% a month throughout 2006. If things keep going as they are, I will realize a profit of about 400%, expressed in yearly terms.

I was told by a person at rev canada, that I would have to report any growth beyond my original investment as ‘capital gains’ on this. but that only seems to apply if i ‘take out’ money from the fund, sell shares, that is.

I want to leave the money in the fund, so that it grows even faster. I would expect that I have to pay interest on the growth anyway. Can anybody tell me what, if anything, I will have to pay on my growth this year, if I leave it all in the fund.

rate of return. One-third of the return on this stock is derived from dividends and the
other two-thirds is derived from capital gains. What is the amount of the next
dividend?

I am a shareholder for a company going through an acquisition and am unsure how the sale of my shares should be accounted for to the IRS and my personal tax consequences.

I originally bought the shares for five years ago. I am selling the shares and will be paid cash amounting to /share upon purchase. However, as part of the purchase agreement for the next two years I will be given a /share at the end of each successive calendar year – for a total of /share.

My understanding is I would have a capital gains of /share ( minus ) this year. Each of the following years I would have a capital gain of /share ( minus {content}). Is my logic correct here? Can you have a basis of {content} or is that going to start setting off (audit) flags. I would sincerely hope to not have to show a capital gain for the full amount as I perceive a non-trivial amount of risk to the future payments as it is predicated on company’s positive cash flow. Any help would be appreciated.