Q: With respect to Ben's question, as long as he keeps documentation of the January 2020 conversion price and his 2020 tax return he will not have to pay double tax on the CG when he does sell BYD. CRA will have that information in their files as well. As long as you have supporting documentation CRA will not double tax you. Ignore the T5008 if it shows ACB of $49. When you call CRA, you typically get the most junior clerk.
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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.
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Horizons S&P 500 Index ETF (HXS)
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Horizons Intl Developed Markets Equity Index ETF (HXDM)
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Dynamic Active International ETF (DXIF)
Q: Good day team,
Please excuse me if this question has been asked before but is there an international focused etf I can contribute to in my tfsa where I don't have to pay withholding taxes? If so, can you list a few please?
Cheers
Please excuse me if this question has been asked before but is there an international focused etf I can contribute to in my tfsa where I don't have to pay withholding taxes? If so, can you list a few please?
Cheers
Q: Hi 5i. I was wondering if you or other members can provide insight on the following tax issue.
I bought Boyd Group Income fund in 2015 ($49/share) in my BMO InvestorLine account. When it converted to a corporation on Jan 1, 2020, my understanding was that it triggered a capital gains event at the conversion price of $202 and that I would have to declare this gain and pay taxes on it in 2020 even if I did not actually sell any of my shares. So I did this, even though I retain all my shares to date.
My issue is that for the 2020 tax year, I did not receive any documentation of the conversion in any brokerage trading summary document or issued T5008 slips, and my investment account still shows the original Cost value of $49.
I called CRA as I was concerned that when I eventually sell the Boyd Group Services shares in the future, the T5008 slip would reflect the original cost value and CRA will claim I need to once again pay capital gains taxes based on the original $49 instead of $202/share.
What CRA told me basically confirmed what I was afraid of -- that is, their assessment will be based purely on information issued on the brokerage T5008 slips and that the cost value would most likely reflect the original $49 share price rather than $202. So I may either have to pay these capital gains taxes again when I do sell, or get reassessed and get a notice saying I owe the CRA additional taxes if I use $202 as the new cost base and deal with the consequences.
I’m wondering if you have any thoughts on this. Also, if any of your other members are in a similar situation, having already paid taxes on this conversion while still holding on to their original Boyd Group services shares and if so, what they did or intend to do.
Many thanks, Ben
I bought Boyd Group Income fund in 2015 ($49/share) in my BMO InvestorLine account. When it converted to a corporation on Jan 1, 2020, my understanding was that it triggered a capital gains event at the conversion price of $202 and that I would have to declare this gain and pay taxes on it in 2020 even if I did not actually sell any of my shares. So I did this, even though I retain all my shares to date.
My issue is that for the 2020 tax year, I did not receive any documentation of the conversion in any brokerage trading summary document or issued T5008 slips, and my investment account still shows the original Cost value of $49.
I called CRA as I was concerned that when I eventually sell the Boyd Group Services shares in the future, the T5008 slip would reflect the original cost value and CRA will claim I need to once again pay capital gains taxes based on the original $49 instead of $202/share.
What CRA told me basically confirmed what I was afraid of -- that is, their assessment will be based purely on information issued on the brokerage T5008 slips and that the cost value would most likely reflect the original $49 share price rather than $202. So I may either have to pay these capital gains taxes again when I do sell, or get reassessed and get a notice saying I owe the CRA additional taxes if I use $202 as the new cost base and deal with the consequences.
I’m wondering if you have any thoughts on this. Also, if any of your other members are in a similar situation, having already paid taxes on this conversion while still holding on to their original Boyd Group services shares and if so, what they did or intend to do.
Many thanks, Ben
Q: Hi team
I made a sizable gain of KL (non registered account) over the long term, now that there is a chance of merging with AEM
if I decided to let the stock of KL merge with AEM; do I have to pay capital gains?
as there is very little premium of AEM to take over the KL, is there a good chance
that the shareholders of KL would reject the take over? thanks
Michael
I made a sizable gain of KL (non registered account) over the long term, now that there is a chance of merging with AEM
if I decided to let the stock of KL merge with AEM; do I have to pay capital gains?
as there is very little premium of AEM to take over the KL, is there a good chance
that the shareholders of KL would reject the take over? thanks
Michael
Q: Peak tax loss selling season. Is there such a time and if so when?
Q: BEP.UN (TSX) pays source dividends in US dollars I believe. If this stock is in a Canadian TFSA, is it subject to US with holding tax.
Thank you
Thank you
Q: Regarding Robert's question this morning about withholding taxes on foreign dividends:
It is my understanding that there are no withholding taxes on the dividends of companies headquartered in the U.K.
I have never had taxes withheld on my U.K. holdings (BTI, BP, AZN). RIO plc is also headquartered in the U.K.
This is a very informative website:
www.dividend.com/dividend-education/everything-investors-need-to-know-about-foreign-dividend-stocks/
It is my understanding that there are no withholding taxes on the dividends of companies headquartered in the U.K.
I have never had taxes withheld on my U.K. holdings (BTI, BP, AZN). RIO plc is also headquartered in the U.K.
This is a very informative website:
www.dividend.com/dividend-education/everything-investors-need-to-know-about-foreign-dividend-stocks/
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Rio Tinto Plc (RIO)
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VALE S.A. American Depositary Shares Each Representing one (VALE)
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BHP Group Ltd. (BHP)
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Sibanye Stillwater Limited - ADR (SBSW)
Q: Hello. As a Canadian resident, how are the dividends from these companies handled in respect of any hold back and taxes? They would be held in a non registered account.
Q: Can losses on us equities be claimed as losses on my Canadian income taxes?
Q: Hi 5i,
If a Canadian stock trades on a US Exchange, are the dividends paid out in US$? If so are there any withholding taxes.
Thanks for all the great work. Ivan
If a Canadian stock trades on a US Exchange, are the dividends paid out in US$? If so are there any withholding taxes.
Thanks for all the great work. Ivan
Q: Would appreciate your thoughts on what types or specific investments to hold in the three kinds of accounts: investment, tax free savings and registered retirement savings.
Would the selection of investments change based on age or time perspective (long range vs. short range) ?
This could involve dividend rate, growth, taxation issues, demographic and technology changes, climate perspectives, ESG considerations or other factors.
Thank you for your investing insights.
Would the selection of investments change based on age or time perspective (long range vs. short range) ?
This could involve dividend rate, growth, taxation issues, demographic and technology changes, climate perspectives, ESG considerations or other factors.
Thank you for your investing insights.
Q: Are there any tax disadvantages to adding XSP or ZSP to a non-registered account?
Q: Hi
Can I sell AEM for tax loss in my cash account and buy XMA on the same day?
It is noted that AEM is 4.74%.of XMA.
Would this allow me the tax loss?
Any other suggestions you have are most welcome.
Thank you
Mike
Can I sell AEM for tax loss in my cash account and buy XMA on the same day?
It is noted that AEM is 4.74%.of XMA.
Would this allow me the tax loss?
Any other suggestions you have are most welcome.
Thank you
Mike
Q: I am trying to understand the impact of a 75% Capital Gains inclusion rate. Today with a 50% inclusion rate, assuming a 50% personal tax rate, you keep 75% of any taxable gain. With a 75% inclusion rate you would keep 62.5%, or 16.7% less. Is my math correct?
In a 75% inclusion rate, can 75% of the loss be used against gains? ie. a $100 gain would be offset by $100 loss meaning no tax would be due just as it is today?
If this is true, you may be best to lock in gains and save 16.7% if its a holding you plan on selling in the next year or two anyways. You can always buy it back immediately after locking in the gain. 16,7% seems significant
On the LOSS side, it seems more black and white. Today you can claim 50% of the loss and if there is a change to 75% inclusion rate, you can claim 75% of the loss next year. If there is no change to the inclusion rate a 50% loss claimed this year or next year is marginally better to claim now but if the inclusion rate changes from 50% to 75% it will be worth 50% more next year. It seems to me you are better off waiting until next year to claim any losses.
Is this a valid analysis or am I missing something.
Many Thanks
Scott
In a 75% inclusion rate, can 75% of the loss be used against gains? ie. a $100 gain would be offset by $100 loss meaning no tax would be due just as it is today?
If this is true, you may be best to lock in gains and save 16.7% if its a holding you plan on selling in the next year or two anyways. You can always buy it back immediately after locking in the gain. 16,7% seems significant
On the LOSS side, it seems more black and white. Today you can claim 50% of the loss and if there is a change to 75% inclusion rate, you can claim 75% of the loss next year. If there is no change to the inclusion rate a 50% loss claimed this year or next year is marginally better to claim now but if the inclusion rate changes from 50% to 75% it will be worth 50% more next year. It seems to me you are better off waiting until next year to claim any losses.
Is this a valid analysis or am I missing something.
Many Thanks
Scott
Q: Just to be clear. If I journal a company from my CDN to US account, then the dividends are still subject to the Canadian dividend tax credit, even though they are paid in US funds.
The internet says: "
Since U.S. dividends are not paid from Canadian corporations, U.S. dividends do not qualify for the preferential Canadian dividend tax treatment. Foreign dividends, including U.S. dividends, are subject to tax at your marginal tax rate like interest income."
The internet says: "
Since U.S. dividends are not paid from Canadian corporations, U.S. dividends do not qualify for the preferential Canadian dividend tax treatment. Foreign dividends, including U.S. dividends, are subject to tax at your marginal tax rate like interest income."
Q: Hi 5i Team - I have shares of ECN in both my non-registered and TFSA accounts. Could you tell me if the special dividend of $7.50 will be treated by Revenue Canada as a regular dividend by a Canadian corporation. If so then there will be a percentage added to the amount of dividend for total income purposes which could affect my marginal tax rate. Is it better then to move the non-registered shares into my TFSA (in spite of the dividend tax credit) which will trigger a capital gains of 50% of the profit. Thanks as always for the great service!
Q: Hello Peter,
Have you been able to assess the probability of the US and Canada raising capital gains inclusion rate to 75%? If so, what is the impact to dividend and growth stocks?
If this does look imminent what would be the strategy to address a potential 10%-15% decline for Non-registered, RRSP, and TFSA accounts? We are almost retired and do not have 10-15 years of investment time for the effect of this change to balance out.
Cheers,
Jerry and Debbie
Have you been able to assess the probability of the US and Canada raising capital gains inclusion rate to 75%? If so, what is the impact to dividend and growth stocks?
If this does look imminent what would be the strategy to address a potential 10%-15% decline for Non-registered, RRSP, and TFSA accounts? We are almost retired and do not have 10-15 years of investment time for the effect of this change to balance out.
Cheers,
Jerry and Debbie
Q: With the NDP tail wagging the dog again and the possibility that capital gains taxes could well move from 50% to 75% what general changes do you recommend for those of us with a significant amount of appreciated stocks in our unregistered portfolios?
Q: What is the "Exchangeco" company? Does it makes sense to take the option of exchangeco shares?
From the circular:
Eligible Canadian shareholders will be able to elect to receive shares of Exchangeco (“Exchangeable Shares”) in lieu of the Penn Shares to which they would otherwise be entitled. Each whole Exchangeable Share will be exchangeable for one whole Penn Share, subject to adjustment.
From the circular:
Eligible Canadian shareholders will be able to elect to receive shares of Exchangeco (“Exchangeable Shares”) in lieu of the Penn Shares to which they would otherwise be entitled. Each whole Exchangeable Share will be exchangeable for one whole Penn Share, subject to adjustment.
Q: Hi,
The recent questions on paying income tax on capital gains now, in case the inclusion rate rises, mention a 30 day buyback period. I thought this 30 day wait before repurchase was applicable to capital losses only. If I sell shares and realise a capital gain, I don't have to wait 30 days to buy the same shares back. Is this correct?
Thanks
The recent questions on paying income tax on capital gains now, in case the inclusion rate rises, mention a 30 day buyback period. I thought this 30 day wait before repurchase was applicable to capital losses only. If I sell shares and realise a capital gain, I don't have to wait 30 days to buy the same shares back. Is this correct?
Thanks