Q: hi,
Is the "dividend" paid from ZRE actually treated as "interest" for tax purposes? and therefore, this would be best held in an RRSP? and more generally, in your opinion, which accounts are best for holding CDN vs US dividend stocks, CDN and US growth stocks (ie lots of capital gains ), and fixed income/interest?
cheers and thanks, chris
Is the "dividend" paid from ZRE actually treated as "interest" for tax purposes? and therefore, this would be best held in an RRSP? and more generally, in your opinion, which accounts are best for holding CDN vs US dividend stocks, CDN and US growth stocks (ie lots of capital gains ), and fixed income/interest?
cheers and thanks, chris
5i Research Answer:
Distributions from ZRE consist of return of capital, which is not treated as 'interest' for tax purposes. This requires some adjustments called adjusted cost base on the investor's end. There is no way to reduce the tax impact, otherwise. While there is no difference between an RRSP and TFSA treatment in this case, typically, we would suggest moving all interest-paying securities to an RRSP, leaving more room for growth in a TFSA and dividend tax credit stocks in a cash account. More can be read here.
https://www.5iresearch.ca/index.php?p=blog.ViewPost&post=533
Authors of this answer, directors, partners and/or officers of 5i Research and/or affiliated companies have a financial or other interest in ZRE.