Q: I read your response to whether US withholding tax applies to the Brookfield partnerships. In your answer you also used the word “accounts.” What do you mean by this word?
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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: I have a non-registered account that mainly consists of Canadian dividend-paying blue chip stocks. I'm retired. I'm looking at including XRE for diversification. I am fairly flexible on whether or not to put it into this particular account or an RRSP. From a tax point of view, would you have any recommendation ?
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Brookfield Renewable Partners L.P. (BEP.UN $35.16)
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Brookfield Infrastructure Partners L.P. (BIP.UN $42.37)
Q: I hold the above stocks in my RRSP. I understand that as of January 1, 2023, the IRS will require a 10% withholding tax when Canadian residents sell a limited partnership. Does this only apply to US based partnerships? Would it apply to BIP.un or BEP.un? Does it apply to partnerships held in an RRSP? It appears this could apply even if you sold at a loss. Thanks for your advice.
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Brookfield Renewable Partners L.P. (BEP.UN $35.16)
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Brookfield Infrastructure Partners L.P. (BIP.UN $42.37)
Q: Just received a letter from my discount broker advising of changes to US withholding tax on distributions and dispositions starting January 1, 2023 that "might" apply to Canadians holding publicly traded partnerships in any account, including RSPs. As a long-term holder of both BIP and BEP, I have significant capital and gains on both. These are held in an RSP, so I have never been concerned about any tax implications. But now . . . ? The Brookfield site advises that they "do not expect" non-US investors to be subject to any withholding tax, and there is also a letter from their tax lawyers with the same claim with a bit more positive wording, but it ends with a disclaimer (hey - we could be wrong!)
I do not want to sell either BIP or BEP, but it would annoy me more if I ended up losing the withholding tax on distributions and (particularly) dispositions. Not sure how the IRS can withhold tax on a Canadian selling a non-US based company, but obviously there is a way, as the letter came from my Canadian big-bank brokerage which also has a significant presence in the US. Also assume that with the stocks being in an RSP, there would be no means of recovery through tax credits.
I would appreciate any comments you have on this matter. If the stocks should be sold, it would have to be done this year. Would this problem also apply to BIPC and BEPC, if I just did a switch?
Thank-you, Grant
I do not want to sell either BIP or BEP, but it would annoy me more if I ended up losing the withholding tax on distributions and (particularly) dispositions. Not sure how the IRS can withhold tax on a Canadian selling a non-US based company, but obviously there is a way, as the letter came from my Canadian big-bank brokerage which also has a significant presence in the US. Also assume that with the stocks being in an RSP, there would be no means of recovery through tax credits.
I would appreciate any comments you have on this matter. If the stocks should be sold, it would have to be done this year. Would this problem also apply to BIPC and BEPC, if I just did a switch?
Thank-you, Grant
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iShares S&P/TSX Canadian Preferred Share Index ETF (CPD $13.53)
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iShares Convertible Bond Index ETF (CVD $18.15)
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iShares U.S. High Yield Bond Index ETF (CAD-Hedged) (XHY $16.80)
Q: Hello Peter,
This question is relating to your holdings in your Income Model Portfolio. Are all the income declared from these investments qualify for dividends tax credits? Or are they treated as normal income like interest income from GICs and would be subject to our normal tax rate?
If it is taxed at our marginal rate, would you recommend holding these investments in a RRSP account?
Many thanks,
Roger
This question is relating to your holdings in your Income Model Portfolio. Are all the income declared from these investments qualify for dividends tax credits? Or are they treated as normal income like interest income from GICs and would be subject to our normal tax rate?
If it is taxed at our marginal rate, would you recommend holding these investments in a RRSP account?
Many thanks,
Roger
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Brookfield Renewable Partners L.P. (BEP.UN $35.16)
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Brookfield Infrastructure Partners L.P. (BIP.UN $42.37)
Q: Hello, I know your are not tax expert, but I risk myself asking because I am sure other members will receive a similar letter from their online broker. This is about the new US regulation code 1446. The letter I received today says:
Changes to the U.S. Taxation of Publicly Traded Partnerships.
New US regulations taking effect on January 1, 2023, will result in new withholding taxes for sales of publicly traded partnerships by non-US account holders.
Once these rules take effect in 2023, when a non-US national sells an interest in a publicly traded partnership, 10% of the gross proceeds of the sale will be withheld. The withholding taxes will be remitted to the US Treasury, and the non-US national will be responsible for filing a US income tax return and claiming any potential refund of the amount withheld.
Not all publicly traded partnerships will be subject to withholding. However, at this point it is difficult to say which publicly traded partnerships will and will not fall within the scope of the new rules...
I did phone my online broker to know more. I was told that I have two companies in my account affected by this: BEP.UN-CA and BIP.UN-CA. Even if they are held in a RRSP, these will be subjected to the new tax if I sell after January 1, 2023. I argued that these are Canadian companies, but they replied that because they are limited partnership and trade on both the Canadian and US markets the new 1446 regulation will apply.
According to what you know of Brookfield, is that true that this new tax will apply on both BIP.UN-CA and BEP.UN-CA starting from January 1, 2023? Thank you,
Changes to the U.S. Taxation of Publicly Traded Partnerships.
New US regulations taking effect on January 1, 2023, will result in new withholding taxes for sales of publicly traded partnerships by non-US account holders.
Once these rules take effect in 2023, when a non-US national sells an interest in a publicly traded partnership, 10% of the gross proceeds of the sale will be withheld. The withholding taxes will be remitted to the US Treasury, and the non-US national will be responsible for filing a US income tax return and claiming any potential refund of the amount withheld.
Not all publicly traded partnerships will be subject to withholding. However, at this point it is difficult to say which publicly traded partnerships will and will not fall within the scope of the new rules...
I did phone my online broker to know more. I was told that I have two companies in my account affected by this: BEP.UN-CA and BIP.UN-CA. Even if they are held in a RRSP, these will be subjected to the new tax if I sell after January 1, 2023. I argued that these are Canadian companies, but they replied that because they are limited partnership and trade on both the Canadian and US markets the new 1446 regulation will apply.
According to what you know of Brookfield, is that true that this new tax will apply on both BIP.UN-CA and BEP.UN-CA starting from January 1, 2023? Thank you,
Q: FYI - I just received a notice from TD of "Potential changes coming to publicly traded partrneships from January 1, 2003" stating that a 10% US withholding tax may be levied on dispositions of and distributions from all Publicly Traded US and CND Partneships held by non US persons in ANY account type including RRSPs, TFSA, RIFs, RESPs........it then goes on to say that BIP, BEP and BBU do not expect non-US investors to be subject to US withholding tax.
Q: If zwk is in my rrif account,is there a withholding tax?
Q: Wondering what has happened with this company. It is now in US funds and no longer halted. Noticed some trading yesterday and today none. Will this be difficult to sell and do you see this trading again. If it does I'm assuming one should sell. Would there be any point in hanging onto it. Also, if no one is buying/selling what is process for getting rid of it to claim a loss? Thank you!
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BMO MSCI Emerging Markets Index ETF (ZEM $25.22)
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Vanguard FTSE Emerging Markets All Cap Index ETF (VEE $43.39)
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Global X Emerging Markets Equity Index Corporate Class ETF (HXEM $43.76)
Q: Hi
can you recommend a proxy for zem for tax loss harvesting?
thanks
can you recommend a proxy for zem for tax loss harvesting?
thanks
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Stryker Corporation (SYK $394.22)
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Health Care Select Sector SPDR (XLV $138.17)
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iShares U.S. Medical Devices ETF (IHI $62.87)
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Smith & Nephew SNATS Inc. (SNN $37.49)
Q: Hi
I am down quite a bit on SNN? I am temped to sell for a tax loss and replace with xlv or IHI but am concerned that xlv or ihi as etfs do not have the same bounce potential as snn. is there another healthcare stock you can recommend or would you replace with xlv or ihi?
thanks
I am down quite a bit on SNN? I am temped to sell for a tax loss and replace with xlv or IHI but am concerned that xlv or ihi as etfs do not have the same bounce potential as snn. is there another healthcare stock you can recommend or would you replace with xlv or ihi?
thanks
Q: Tudor spun out some assets to Goldstorm, and I now own some Goldstorm shares, in addition to the Tudor shares. It seems the transaction simply took some of my cost base, and applied it as cost to the new shares. Am I reading this right? Basically, nothing has changed, right? Or will I need to record a capital transaction on Tudor?
Q: One of your subscribers said this in a question answered today, "I own 500 shares of TOU. Because I bought them a couple years ago and trimmed as they rose, my dollar cost average on these shares is zero!!" Is dollar cost average different from book value and if it is not, how does it go to zero?
Q: Below is an email from Interactive Brokers.
"As a result of recent US legislation under Internal Revenue Code Section 1446(f), gross proceeds from sales of and certain distributions from Publicly Traded Partnerships ("PTPs") held by non-US tax residents (both individuals and entities) will be subject to 10% withholding starting on January 1, 2023."
It is not clear to me that the 10% withholding tax is on the distributions only or 10 % tax will also be applicable to the total proceeds amount when I sell it ?
The company involved in my case is ET but can also be applicable to other publicly traded partnerships.
Thanks for looking into this.
"As a result of recent US legislation under Internal Revenue Code Section 1446(f), gross proceeds from sales of and certain distributions from Publicly Traded Partnerships ("PTPs") held by non-US tax residents (both individuals and entities) will be subject to 10% withholding starting on January 1, 2023."
It is not clear to me that the 10% withholding tax is on the distributions only or 10 % tax will also be applicable to the total proceeds amount when I sell it ?
The company involved in my case is ET but can also be applicable to other publicly traded partnerships.
Thanks for looking into this.
Q: I know that for tax relief purposes it would be best to hold US investments(equities) in registered accounts. Due to age I am being forced to deregister and into unregistered and to a lesser extent TFSA's.
Employing ETF's for these and future holdings I have a question relative to ETF's that are sold on the TSX but actually hold units of similar US ETF's. Are these Canadian ETF's eligible for withholding tax relief and or Dividend Tax Credit?
Thanks
Employing ETF's for these and future holdings I have a question relative to ETF's that are sold on the TSX but actually hold units of similar US ETF's. Are these Canadian ETF's eligible for withholding tax relief and or Dividend Tax Credit?
Thanks
Q: if you have a drip on a US company . do they still deduct the non resident tax
Q: Which of these stock or ETF's (Bam.a, FTS, SLF, MOAT, VXC, XBB) in my non registered portfolio would you sell and then buy back in TFSA?
Thanks for your help.
Thanks for your help.
Q: Is it better to hold US stocks in a brokerage account instead of a TFSA?
Q: The purpose of the following question is to avoid problems with CRA and avoid pitfalls, traps &c.
(1) If tax payer withdraws all their Canadian $ from a TFSA before December 31, 2022 , I understand they can re-deposit the full amount after January 1 2023. Correct? (2) I understand they can re-deposit the *full allowable* amount in US$ (i.e. the US$ equivalent of all the Canadian $ that were just withdrawn). Is that correct? (3) If yes, is it the spot exchange rate that is used for calculating the amount available to put back into the TFSA? If yes, what exactly is the spot rate, what rate is acceptable under tax rules and regs ? What source should one use to get the exchange rate to use— that CRA accepts?
(1) If tax payer withdraws all their Canadian $ from a TFSA before December 31, 2022 , I understand they can re-deposit the full amount after January 1 2023. Correct? (2) I understand they can re-deposit the *full allowable* amount in US$ (i.e. the US$ equivalent of all the Canadian $ that were just withdrawn). Is that correct? (3) If yes, is it the spot exchange rate that is used for calculating the amount available to put back into the TFSA? If yes, what exactly is the spot rate, what rate is acceptable under tax rules and regs ? What source should one use to get the exchange rate to use— that CRA accepts?
Q: I have 100 shares and got a Oct 28 dividend of $249. Withholding tax was $87 with TD. Does a 35% withholding tax seem right?
Thank you
Thank you