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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: Peter; In regards to Eric’s question on when to sell , with the heirs involved. I was executor for a client of mine - 14 heirs! - anytime I was going to do something - selling securities included- I sent each one a letter with a place to sign and return - agreeing or not , so I had a written document, in case of a problem.
Publish or not.
Rod
Read Answer Asked by Rodney on February 07, 2024
Q: Hi 5i Team,
I understand that interest on loans used to purchase non-dividend paying investments, e.g. stocks, crypto, etc. is not tax deductible. But can I include the amount of interest so paid as a part of my cost base for the purpose of calculating capital gains on disposal of the underlying investments?
Cheers,
H
Read Answer Asked by Harry on February 06, 2024
Q: The ETF, HXS pays no dividend. So if HXS was held in a RESP account, can one avoid the US 15% withholding on dividends, because HXS pays no dividend, whereas ZSP held in a RESP account would be subject to the 15% withholding tax, because it does pay a dividend. Thanks … Cal
Read Answer Asked by cal on February 02, 2024
Q: Good morning,

I am looking for the best ETF to hold in my TFSA account that follows the S&P 500 index along with the reasons for your particular preference?

I understand that since HXS does have any distributions, there is no withholding tax to be concerned with which is an advantage. On the other hand, due to the distinct tax efficient structure of HXS, the MER on the HXS is higher than VFV and other similar ETFs that track the same index.

Given that both ETFs track the same index is there a clear winner for a TFSA account?

Thank you and I'll await your sage advice.
Read Answer Asked by Francesco on February 01, 2024
Q: Hi 5i,
Does the wait 30 days rule to sell and buy back apply to stocks within a TFSA or RRIF?
with thanks'
Connie
Read Answer Asked by Constance on February 01, 2024
Q: Hi

I hold ZSP in my non-registered account and VIG in my RRSP.

My understanding is that it doesn't really make a difference from a withholding tax perspective where I hold ZSP but that the RRSP is where I should hold VIG.

Do you agree?
Read Answer Asked by Robert on January 30, 2024
Q: I have a no. of ETFs with OPTIONS on its 30% approx applied to generate extra income. Naturally it is higher risk/reward but I can not find how to access monthly (or annual) reports on Div income, Options gain/loss or dilution of Equity. Specially Equity dilution is a concern and I wonder if they can avoid informing shareholders such important information.
Read Answer Asked by Ritwik on January 29, 2024
Q: Peter and His Wonder Team
I have to sell one of these stocks to meet my RIF withdrawal obligation for 2023. I have owned them all for years...CET is down; QST down more; QTRH up slightly. Of course since it is a RIF account there is no tax loss credit. So if you had to sell one...what do do think would be the best choice. Thanks for your opinion which is always objective and sobering which helps in my decision in which I take full responsibility.
Read Answer Asked by Ernest on January 29, 2024
Q: If I add to an existing equity position with 1000 shares at $50, my existing ACB is $40, then sell those 1000 shares in 31 days at $52, is my reported capital gain on those 1000 shares $2 or $12. (and let's exclude the obvious change in the ACB with this purchase).

Thank you.

Read Answer Asked by Trevor on January 26, 2024
Q: On Jan. 17 Fernando asked a hypothetical question about keeping down the taxes on capital gains. I don't understand the last sentence of your reply: "Gains can also be reduced by carrying charges (interest) if any of the stocks pay a dividend". Can you please explain this? What in this situation can be written off as a carrying charge?
Read Answer Asked by chris on January 26, 2024
Q: My question relates to tax loss selling.
I sold two stocks prior to year end for a capital loss. However, the dividend payout after the sale date were automatically reinvested into the same two stocks. I called the discount broker a couple of days after this and had them sell the shares.
Do the reinvestment shares nullify the ability to claim the tax loss for the 2023 tax year?

Thanks for your assistance in advance.
Read Answer Asked by Douglas on January 24, 2024
Q: Good afternoon 5i
Taxes. If i buy a US stock with US dollars and sell it several years later. What happens. I know that i have to report the sale in Canadian dollars. But, i imagine that i will have to calculate the exchange rates on those two dates, no? It seems odd, since it was both bought and sold in US dollars.
Thanks
Read Answer Asked by joseph on January 24, 2024
Q: I have some shares that have dropped to half a cent in value. As one might expect these shares are very thinly traded. I would like to harvest a capital loss on this stock for income tax purposes. Do you have a suggestion on how one might go about doing that?
Read Answer Asked by william on January 22, 2024
Q: 9:51 AM 1/20/2024
Does the US newly instituted tax rule on limited partnerships doing any business in the US now apply to BEP.UN, BIP.UN. BEPC, BIPC?
I have owned these for many years and all have very large capital gains in cash accounts so I am reluctant to sell them due to the crippling 10% 'disposition' tax on top of the big capital gain were I to sell. It seems I am caught in a tax trap! I would appreciate any advice on which ones are vulnerable to the tax and what to do.
Regards............ Paul W. K.
Read Answer Asked by Paul on January 22, 2024
Q: Hello 5i
Many thanks for your continuing excellent weekly observations and advice.

In my RRIF, TFSA and Unregistered accounts some of the larger holdings are US companies (GOOG, MSFT, etc). I am concerned that upon my passing some or all of these US stocks may be vulnerable to US Estate Tax.
I know that there are various tax treaties between the US and Canada that might impact some or all of these holdings, but I am unclear on the details.
Can you tell me if either or both the TFSA and RRIF are exempt?
Can you provide references that would cover these questions?
Can you recommend CANADIAN-based ETFs that hold Mag. 7 and/or other popular US stocks?
Thanks again.

Read Answer Asked by David on January 22, 2024
Q: I'm curious as to why you recommend VFV as it is my understanding that it is a Canadian ETF invested in a US S&P 500 ETF which has double taxation in a RRSP and doesn't seemed to be taxed favorably in a TFSA or non registered account either. Wouldn't be better to buy ZSP which invests directly in the S&P stocks or HXS which has a higher fee but no dividend to trigger withholding tax?
Read Answer Asked by Cheryl on January 19, 2024
Q: Hello 5i,
If I transfer winning stocks in kind to a TFSA but do not cash them in will I have to pay tax on the dividends to be received?
Thank you
Stanley
Read Answer Asked by STANLEY on January 19, 2024
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