Investment Q&A

Q: Due to past circumstances and bad advice the majority of our investment portfolio is in Registered Accounts leaving our TFSA's with plenty of room. Would it be wise to gradually over the next 10 years of retirement move (I am not sure if I can move stocks directly in kind) some of the registered $$ which consist of 5i Balanced and Income portfolio stocks to max out the TFSA allowing the stocks I own to grow tax free. I would of course have to pay the tax on RSP withdrawals along the way. I do realize that I would have to manage income accordingly in order not to jump into the next tax bracket. The stocks I would move would be higher growth stocks in order to take advantage of the flexibility of the TFSA. Any advice is appreciated. Many thanks!

Q: A member had asked on the tax treatment for options trading. It is not as straight forward as your answer indicated. It is detailed on http://www.taxtips.ca/personaltax/investing/taxtreatment/options.htm

Q: Your answer on tax loss selling was straight forward. but I would like a bit more clarification on average cost / ACB, as I think there may be two averages costs. The first being the "Bucket Method" What is the average cost of your holding in the bucket at time of sale. This method seems to follow all of the CRA's publications on Capital Gains. The second method could be your average cost of your holding for the year. I think whatever method you choose you have to be consistent in application forever. I would appreciate comments on both of these average costs, or is the second average cost just incorrect. Further on taxes is the question pertaining to selling options that carry over December 31. Do you have a Capital Gain when you sell the option / receive the cash or is the Capital Gains deferred until the option expires. As you can buy back the option any time until expiration date and therefore the contract is not closed. I am sure many readers can express comments on the above.

Q: My accountant is strongly in favour of keeping our U.S. holdings under $100,000 to avoid having to file with the U.S. government. Could you comment on this. We also do try to invest in Canadian companies doing business in U.S. Alan W.

Q: Regaring Davids request on tracking TFSA contributions. cra.gc.ca keeps track of all contributions and withdrawls. This is found in MY ACCOUNT under RRSP & savings plans. However it is not always up to date.
FYI

Q: I have searched widely for the answer to this question but haven>t found one, Perhaps you can help. When claiming tax loss for a certain stock, is it necesssary to claim the ACB, or can you claim, if you are only selling a portion of your holdings in that stock, can you claim the highest price paid?
thanks

Q: Good Morning. I would like to know if there is a time limit to declaring profits and losses on my income tax return. Thank you.

Q: Hi Everybody,

Further to my post yesterday, I found the address I needed; still don't know how to file it electronically though.
Thanks for putting up with me.

Molly

Q: Hi,
Hi
I just now renewed my membership.Will my membership fees be considered as a valid investment expenses under CRA rules and can I get tax deduction from my capital gains while filing my 2015 CRA tax return?
thanks

Q: Responding to a question regarding form T1135. CRA website states that for 2014 you can file this form electronically. But when I phoned U-File they told me that I have to sign and send the form using regular mail. Both U-File and CRA website has the mail address. Using U-File I was able to complete the form and print it. Don't know which packages allow you to send this form electronically. Responding to longstanding frustrations with Form T1135, the government announced in the proposed budget that there will be a streamlined process for taxpayers with between $100,000 and $250,000 in specified foreign income.

Hope this helps.

Q: Hello Peter & Team,

I wonder if I could get some guidance from fellow members about what to do with form T1135 after I've completed it. It sounds like a stupid question but the form seemed not to be a part of my return when I was actually completing it. When I do file my return, can I be sure the T1135 will be included?
Especially as the certification bit needs to be signed. I'm sure I read somewhere that it could be filed electronically too.
Thank you for letting me use your forum like this; I'm getting a little frantic.

Molly

Q: For tax-planning purposes, I'm trying to keep a lid on net income. Can you recommend some quality stocks that pay out a decent, mainly non-dividend distritution (other than REITs and BEP.un, which I already have)?
Thank you!

Q: Hi, I received in 2014 a cash and Verizon stock dividend from Vodafone.My question is do I declare the stock dividend as a dividend or return of capital for adjusted cost base on Vodafone stock. If anyone is in that situation would appreciate the input. Is this a valid quetion ?

Q: Is an RRSP the BEST place to hold these large US DIVIDEND paying Stocks? I know they should NOT b held in a TFSA.

Thanks! Austin

Q: Just a comment to Raymond re the US tax package - if you are a Canadian resident and citizen with BIP in a taxable account, you should have a T5013 for the LP to use for Canadian taxes. You can disregard the US tax package, unless you happen to be a US citizen. Check the Brookfield tax info website included with the US package.

Q: I owned shares in Brookfield Infrastructure for part of 2014. I just received a letter from them enclosing information for filing a 2014 U.S. tax return. The shares were bought and sold on the TSX.

I have held shares in quite a few companies over the years and have never received a similar request so am not sure what to do with this one.

Is this something that you folks know about or do I need to consult a tax adviser?

Thanks for all the great info and help you provide.

Ray

Q: Dear 5i; I was reading through the TFSA questions and the one asked by M S on July 17, 2014 got me thinking about transfers-in-kind and taxation. So firstly, I wouldn't necessarily want to transfer a "gainer" because of the capital gains tax payable. On the other hand, it seems to me that transferring a stock that is currently under-water could be advantageous. This would of course be a stock that I intend to keep because I expect it to recover, so therefore the inability to claim a capital loss is a moot issue. The advantage would be that for a given amount of contribution room, I would be able to transfer a larger number of shares into my TFSA than if the stock were at or above my ACB.

Do you think this is a sound strategy, or are there other considerations that I am missing?

Q: Thank u to Arneh for the clarification on Hxs vs Zsp
I did not mention that it was a non reg account so this was very helpful
Much appreciated

Q: I have taken 50000.00 for a quick trading account and it is split into my wife's and my TFSA's. I plan to actively trade these accounts and the plan is to profit from quick price changes in active companies: like BTO, SGY. I have been doing this for the last couple of months and have increased the account value by 7000.00
My question is this.
On BNN yesterday I heard that TFSA's may be taxed on quick traders. Have you any information that can help me on this. If the gains will be taxed I might as well put the money into RRSP's and RESPs.
Thank you

Q: Wfc Canada is not a foreign affiliate of a Canadian person as that would require the Canadian person to own at least one percent of the company's shares.

However wfc Canada appears to be a Canadian company, in which case the t1135 would not be required.