It's not only about how much you make.
It's also about how much you keep.

By effectively structuring our partnerships, we are usually able to provide our partners with Canadian tax deductions against other sources of income. For instance, real estate allows for the deduction of certain non-cash expenses which enables you to defer taxes on monthly cash distributions as they are treated as return of principal.

Favourable tax strategies substantially increase overall investment returns. The impact of inflation on the deferred taxes until they are paid, when combined with the additional money received from reinvesting deferred taxes, dramatically increases after-tax performance as shown in the example below.

Adjusted Cost Base

Investors can accumulate cash (net of tax) and tax write-offs until their Adjusted Cost Base or ACB (a book value for tax purposes) reaches zero. For tax purposes, when an investor's ACB reaches zero, she has recovered her original invested capital and must start paying capital gains tax on further cash distributions received from that point forward.

Make Inflation work for you

While the taxes deferred will one day be due (i.e., upon sale of the asset), paying taxes at a future date significantly reduces -- in "real" dollar terms (i.e., after inflation) -- the actual amount paid. At the same time, unpaid tax dollars can be invested in order to increase overall earnings substantially. EXAMPLE: Assume $50,000 of tax liability has been deferred for 10 years with an annual 2.5% inflation rate. The nominal value of taxes owing in today's dollars will have been reduced to $39,000. The tax savings, at a 46% tax rate, reinvested at 5%, will have earned an additional $13,000 after tax.

The net effect of 10 years of inflation (saving $11,000) plus opportunity (earning $13,000) combine to value the $50,000 of deferred taxes at $24,000, or 48%! This is in addition to any returns and capital appreciation received by owning the original investment!