Q: How are capital gains taxed? Should it be in a TFSA or not. Greetings, Peter.
5i Research Answer:
The fund will have a mix of interest and capital gains and distributions will be taxed annually. Options income is considered capital gains. When selling the fund in a non-registered account, capital gains taxes will still apply with the sales price minus the adjusted cost base as a capital gain (or loss). As a Canadian listed ETF holding fixed income securities there will be no withholding taxes. We would prefer it in an RRSP.