Investment Q&A

Q: Hi Peter
In 2020, 70% of Q3 and Q4 distribution is marked as “Trust Income”. If held in a taxable account, what is the tax implication of this component? Is it treated as dividend or interest income?

https://www.alarisequitypartners.com/upload/media_element/attachments/412/Tax%20split%20of%20distributions%202020.pdf

Q: I have a follow-up question on TTE. As a French company that trades in the U.S. what would the withholding tax be in a non-registered Canadian account?

Thank-you.

Q: I will soon start to withdraw from my RRSP and I am looking for tax saving ideas. I don’t like the idea that if I was hit by a bus tomorrow (aside from negative outcome for me) that my RRSP would be taxed at 53.53% and my dependents would be left with less than my hard-earned savings. I need your advice and yes I will look both ways before crossing the street. I recently listened to an audio by Allan Schieman where he suggests flow-through shares as a tax saving option. It seems like an interesting idea with some risk. I searched and found a Maple Leaf Fund managed by Craig Porter in BC. I suspect there are many pitfalls here, and I seek your advice and input on two questions i.e, 1. are there any reasonable/recommended flow-through share investment vehicles to help save taxes and 2. How else can I reduce RRSP withdrawal taxes? Please deduct as many questions you see fit. Thanks for your valuable advice.

Q: Are withholding taxes treated the same whether in personal taxable accounts versus being in corporate accounts? In other words, is there a benefit to having certain ETFs in personal taxable account versus a corporate account?

Thanks

Q: Since NTR pays a 3% dividend, for tax efficiency, is it better to hold the stock in a RSP or a TFSA?

Q: I hold a position in XBC that was roughly 2% at purchase, but has dropped by roughly 40% (meaning the position is closer to 1% now). I still believe that this company could return to a better valuation, but that I have an opportunity to crystallize a loss before that time. I would like to purchase a placeholder investment in the same space which XBC operates, and I already have a position in CMC that I am not quite ready to increase (even though it is up nicely since my initial purchase). Is there any other company that you might suggest as a candidate to act as a placeholder for thirty days before I purchase XBC once again, after the loss can be crystallized? Conversely, would you feel that a strong argument could be made that even attempting to crystallize a loss in this position would introduce undue risk to a portfolio? Any insight would be much appreciated, as always. Thanks so much, and I look forward to your response.

Q: It is my understanding that a 75% Capital Gain Inclusion Rate means simply that 75% of the capital gains are subject to tax. The percentage of tax owing is based on one's income. So if one's income was low enough the tax owed on the capital gain might be less than 75%. Brenda's question and your response seems to suggest otherwise. Please correct me if I am mistaken.
Thanks,
Jim

Q: Say the capital gains inclusion rate increase from 50% to 75%. Does that mean it doesn't matter how long you've held the stock when you sell it gains are taxed at 75%? I'm not sure how the last rate changes were implemented but you may recall.

Q: I have USA stocks in joint margin account with Canadian Broker .
When calculating if cost amount of total value Foreign Property exceeds $100,000 CAD I will use highest total value of Book Cost of all US securities.
My question is: do you have to include in calculation of Total Amount any cash siting in my US account?

Andrew

Q: I HAVE A QUESTION ABOUT WITH DRAWING FROM AN RRSP ACCOUNT. MY WIFE WANTS TO WITHDRAW $20,000 FROM HER RRSP ACCOUNT FROM AUGUST TO END OF YEAR. BY WITH DRAWING $5,000 AT A TIME SHE WILL PAY 10% OVER THE COUNTER FEES. BUT OUR BROKER TOLD US THAT HER SECOND WITHDRAW THEY WOULD TAKE 20% INSTEAD OF 10% I FIND IT LITTLE STRANGE BECAUSE IN THE PAST I WITH DREW $5,000 AT A TIME TO ONLY PAY 10%. OR HAS SOMETHING CHANGED IN THE LAST COUPLE OF YEARS.

Q: My investment income has been bumping up against the OAS clawback level the last couple years (damn that dividend gross-up!), so I have moved some investments into reits and ETFs with high return of capital to keep reportable income down. Aside from the obvious - that ROC becomes capital gains when the stock is sold - are there some negatives about ROC or high ROC stocks of which I should be aware?
Thank-you

Q: Do you know the cost base of these shares? I have it in a couple of different accounts at TD and the cost base is different in each account. Also, when I go to add BAMR:CA in my 5i Portfolio Analysis only BAMR:US is available.

Q: My BPO.UN shares are in a non registered account. If I sell now I will have capital gains. I was told that if I wait for the rollover into BAM and/or BPY Preferreds the rollover is tax free, Can you please comment on this.
Thank you.
Philip

Q: I see your report on CDN companies paying US dividends and was wondering if currency gains are allowable in tax free accounts. If one were to accumulate US$ in the account and then flip to CDN$ at a profit would this put you offside with CRA?

Q: Dear 5i,
If I hold BIPC.CA, BIPC.US, BEPC.CA, or BEPC.US in my non-registered Canadian account. do I have include them if I have to file Form T1135.
If yes what is the country code?

Q: Hi 5i Team. The dialog and information related to form T1135 from earlier today was very helpful. To further the discussion let me ask the following; would the following ETF's (below) be considered a foreign assets under the CRA and need to be reported with Part B of the T1135? ETF's - ZWE, ZEM, ZPAY, ZWH, CARS.B, LIFE.B, ICLN, PID. Thx Steve

Q: Hi. I’m writing in response to Andrew’s earlier question regarding whether or not he needs to report BEP.UN on his T1135. I’d looked into this earlier this year for BEPC, BIPC, BIP.UN and BEP.UN. Brookfield’s web site addresses this specifically. Below is the link, and direct quote.

https://bep.brookfield.com/stock-and-distribution/tax-information

“Are units considered foreign property for the purposes of the Canada Revenue Agency T-1135 Form – Foreign Income Verification Statement?
No.”

Hope this assists.

Regards

Q: I have BEP.UN.CA in my non-registered Canadian account. I want to know if I have to report it when I am file Form T1135.
If yes what is the country code for BEP.UN.CA?

Andrew

Q: Hi,

keeping in view the US Withholding tax on canadian investors.

If one has to hold US S&P 500, US mediam &small cap, US IT/technology ETF in canada.

Then which ETF would be be the best for a TFSA and cash account. ( I believe in a RRSP it does not matter ).

I currently hold SPY,VFV, IWO, VGT and QQQ in my TFSA and cash account. Do you think they are OK, or will you recommend some equivalent more efficient ETF's for exposure these sectors.

Keeping in view the difference between a TFSA and cash account, please suggest suitable ETF's for each, which would mirror SPY, VFV, VGT, IWO and QQQ.

Thanks
Harry

Q: This question is about Capital Gains Tax. Over a 5 year period I ended up buying a single stock at different prices in 3 separate accounts...Cash, Tax Free and Rif. So when I sell I am not sure what buying price to use. For example if I sold the stock in the cash account do I use the purchase price in that account or must I use an average of the 3 accounts. I guess the purchase price does not matter in the case of the Tax Free or Rif? Thanks for your clarification!