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?
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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: 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
Q: One of the many great skills I've picked up as a member here is tax-loss harvesting. Recently, I saw a question that piqued my interest in the notion of "harvesting" outstanding capital gains to apply capital losses against in a pro-active manner.
To date, I've simply been carrying by my capital losses forward happy in the fact that when I do need to realize a capital gain, they will be there to help me out. Now I'm wondering if there may be value in getting a little crafty with selling stocks that are up and re-purchasing in 30 days to "tax harvest"? Without putting too much thought into it, the only advantage I can see in doing this would be dodging capital gain inclusion rate increases that may arise moving forward. Are there other reasons this may be a profitable tactic?
Thank you!
To date, I've simply been carrying by my capital losses forward happy in the fact that when I do need to realize a capital gain, they will be there to help me out. Now I'm wondering if there may be value in getting a little crafty with selling stocks that are up and re-purchasing in 30 days to "tax harvest"? Without putting too much thought into it, the only advantage I can see in doing this would be dodging capital gain inclusion rate increases that may arise moving forward. Are there other reasons this may be a profitable tactic?
Thank you!
Q: Hello, do the Nuvei Corporation shares NVEI.TO count toward the $100k limit before we need to fill out a T.1135 at tax filing time? Thanks,
Q: Hello, do the CDRs from CIBC count toward the $100k limit before we need to fill out a T.1135 at tax filing time? Thanks,
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Strathcona Resources Ltd. (SCR)
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Power Financial Corporation (PWF)
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Inter Pipeline Ltd. (IPL)
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PENN Entertainment Inc. (PENN)
Q: Greetings:
I know because it has been mentioned countless times that you are not tax experts, but perhaps you can help. When does a section 85 form need to be filed and when not? In the case of IPL, PWF, Uranium participation by Sprott Uranium Trust it is necessary, but not with score media and Penn. Perhaps it depends if it is a merger or acquisition, and what determines this. Perhaps the rules have changed in the last months. Thanks for your help.
BEN.
I know because it has been mentioned countless times that you are not tax experts, but perhaps you can help. When does a section 85 form need to be filed and when not? In the case of IPL, PWF, Uranium participation by Sprott Uranium Trust it is necessary, but not with score media and Penn. Perhaps it depends if it is a merger or acquisition, and what determines this. Perhaps the rules have changed in the last months. Thanks for your help.
BEN.
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Dollarama Inc. (DOL)
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Metro Inc. (MRU)
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Wheaton Precious Metals Corp. (WPM)
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Stantec Inc. (STN)
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Kinaxis Inc. (KXS)
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Thomson Reuters Corporation (TRI)
Q: Hi, I need to harvest realized gain of approx. $15000. I plan to repurchase the above funds after 30 days. Are there any that you would not sell at this point?
Or after the 3rd quarter results?
Thank you for your excellent service.
Or after the 3rd quarter results?
Thank you for your excellent service.
Q: I recently asked a question about recommended ETF holdings in my RRSP for coverage of the US market. You had suggested converting my holdings to USD and purchase VOO direct on the US market rather than the CAD ETFs I currently hold. This would eliminate withholding taxes.
How much of a drag on performance would these withholding taxes represent?
How much of a drag on performance would these withholding taxes represent?
Q: Federal Election
Jagmeet Singh has proposed a 75% Capital Gains tax.
If Trudeau gets back with a minority government, (proped-up by Singh) does this change seem likely? If so, what action do you recommend investors take?
Jagmeet Singh has proposed a 75% Capital Gains tax.
If Trudeau gets back with a minority government, (proped-up by Singh) does this change seem likely? If so, what action do you recommend investors take?
Q: Canadian Vs U.S. Banks.
Are the banks in both countries taxed differently, if so, please explain.
Are the banks in both countries taxed differently, if so, please explain.
Q: Regarding purchases made on US exchanges….
a) If I purchase Canadian companies in my margin account on the NYSE in US dollars, will the dividends also be paid in US currency? What will the withholding measures be on those dividends?
b) If I purchase European companies on US exchanges, what will the withholding measures be on those European dividends? (Germany, France)
a) If I purchase Canadian companies in my margin account on the NYSE in US dollars, will the dividends also be paid in US currency? What will the withholding measures be on those dividends?
b) If I purchase European companies on US exchanges, what will the withholding measures be on those European dividends? (Germany, France)
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BMO S&P 500 Index ETF (ZSP)
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iShares U.S. Small Cap Index ETF (CAD-Hedged) (XSU)
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Vanguard U.S. Total Market Index ETF (VUN)
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BMO Nasdaq 100 Equity Index ETF (ZNQ)
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BMO Premium Yield ETF (ZPAY)
Q: I hold the US portion of my portfolio in my RRSP. It represents roughly 20% of my total investment. I do not need to convert to RRIF for another 5 years and at that time will be taking the minimum required.
I currently hold ZQQ; ZPAY; ZDY; ZWH; ZSP.
I am thinking of switching my holdings to the following in roughly equal amounts: ZPAY; VUN; ZSP; ZNQ; XSU.
The objective is to get better coverage of the total US market through XSU and VUN. Maintain coverage of S&P 500 through ZSP. For Tech switching to non hedged via ZNQ. ZPAY will still provide good income with perhaps some downside protection through its options strategy.
Your thoughts and recommendations of alternatives.
The rest of my portfolio in my Non-Registered account and TFSA follow a mixture of your 3 portfolios which by the way have provide me with a return of 12 - 15% in the past 6 plus years.
I currently hold ZQQ; ZPAY; ZDY; ZWH; ZSP.
I am thinking of switching my holdings to the following in roughly equal amounts: ZPAY; VUN; ZSP; ZNQ; XSU.
The objective is to get better coverage of the total US market through XSU and VUN. Maintain coverage of S&P 500 through ZSP. For Tech switching to non hedged via ZNQ. ZPAY will still provide good income with perhaps some downside protection through its options strategy.
Your thoughts and recommendations of alternatives.
The rest of my portfolio in my Non-Registered account and TFSA follow a mixture of your 3 portfolios which by the way have provide me with a return of 12 - 15% in the past 6 plus years.
Q: Hi
Before I posted this question, I went through CMS archives and searched the questions bank here as well. As I didn't get any "hits" I thought of asking you folks.
I was recently told that establishing a Joint Partner Trust is a good way to go if one
a. wants to avoid probate fee even for the primary residence
b. to shelter probate and other fees for assets held in a private corporation
c. transfer wealth to future generations with certain amount of protection.
d. Arguably the best way to go forward if one's adult kids are in the US (through a Dynasty Trust)
Any thoughts about JPT? Especially for professionals who own a private holding company/corporation. If you think JPT is not the way to go, what would you suggest?
An article is begging to be written in CMS!
Many thanks.
Mano.
Before I posted this question, I went through CMS archives and searched the questions bank here as well. As I didn't get any "hits" I thought of asking you folks.
I was recently told that establishing a Joint Partner Trust is a good way to go if one
a. wants to avoid probate fee even for the primary residence
b. to shelter probate and other fees for assets held in a private corporation
c. transfer wealth to future generations with certain amount of protection.
d. Arguably the best way to go forward if one's adult kids are in the US (through a Dynasty Trust)
Any thoughts about JPT? Especially for professionals who own a private holding company/corporation. If you think JPT is not the way to go, what would you suggest?
An article is begging to be written in CMS!
Many thanks.
Mano.
Q: Hello, are the distributions from ZWU taxed as a dividend or income? thank you.
Q: Hi 5i team,
I am considering using DLR and DLR.U to buy USD and avoid the higher fees the bank charges to convert CAD to USD. But is it worth the hassle in a non-registered account because you might have a capital gain (or loss) to declare when you file your tax return the following year?
Here is an example. If I were to buy US$10,000 today my bank would charge me C$12,756. 1 CAD = 0.7839 USD
If I buy 1000 shares of DLR @ C$12.69 (plus $9.95 commission) that would cost me C$12,699.95. Five minutes later I sell 1000 shares of DLR.U at US$10.07 (plus US$9.95 commission). The proceeds of disposition would be US$10,060.95.
So US$10,000 using DLR/DLR.U would equate to C$12,624.14. That saves me C$131.86 [12,756 – 12,624.14] compared to buying it directly using the bank’s exchange rate. That is about a 1% savings.
But because this is done in a non-registered account I would have to declare the sale of DLR.U when I file next year’s tax return. From what I know you can use the “average” exchange rate for that year as per CRA, or the exact rate on the day of the transaction. So if I use the exact rate (I am guessing it would be 0.7839 as that is what the bank would charge me) I would have a capital gain of approximately C$131 to declare and then have to pay tax on that gain. At 50% tax bracket, the tax would be ~$33. So the net savings are now ~C$98. Final savings are 0.78% of the transaction. If I use the CRA’s “average” exchange rate for 2021 I could have a gain or a loss depending on what that rate is.
I can see this works fine if you do this in a registered account like an RRSP as you don’t have to declare the gain on the currency exchange, but in a non-registered account this seems like a lot of effort for small savings, at least for US$10K. Perhaps it is worth the hassle if you are converting a much large amount like US$50K, or US$100K.
Am I missing something in my example?
Paul
I am considering using DLR and DLR.U to buy USD and avoid the higher fees the bank charges to convert CAD to USD. But is it worth the hassle in a non-registered account because you might have a capital gain (or loss) to declare when you file your tax return the following year?
Here is an example. If I were to buy US$10,000 today my bank would charge me C$12,756. 1 CAD = 0.7839 USD
If I buy 1000 shares of DLR @ C$12.69 (plus $9.95 commission) that would cost me C$12,699.95. Five minutes later I sell 1000 shares of DLR.U at US$10.07 (plus US$9.95 commission). The proceeds of disposition would be US$10,060.95.
So US$10,000 using DLR/DLR.U would equate to C$12,624.14. That saves me C$131.86 [12,756 – 12,624.14] compared to buying it directly using the bank’s exchange rate. That is about a 1% savings.
But because this is done in a non-registered account I would have to declare the sale of DLR.U when I file next year’s tax return. From what I know you can use the “average” exchange rate for that year as per CRA, or the exact rate on the day of the transaction. So if I use the exact rate (I am guessing it would be 0.7839 as that is what the bank would charge me) I would have a capital gain of approximately C$131 to declare and then have to pay tax on that gain. At 50% tax bracket, the tax would be ~$33. So the net savings are now ~C$98. Final savings are 0.78% of the transaction. If I use the CRA’s “average” exchange rate for 2021 I could have a gain or a loss depending on what that rate is.
I can see this works fine if you do this in a registered account like an RRSP as you don’t have to declare the gain on the currency exchange, but in a non-registered account this seems like a lot of effort for small savings, at least for US$10K. Perhaps it is worth the hassle if you are converting a much large amount like US$50K, or US$100K.
Am I missing something in my example?
Paul
Q: Hi Peter,
If you sell a stock in a TFSA or a RRSP account, you can purchase the same stock in a non-registered account the very next day and do not have to wait for the 30 day rule?
If you sell a stock in a TFSA or a RRSP account, you can purchase the same stock in a non-registered account the very next day and do not have to wait for the 30 day rule?
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Brookfield Reinsurance Ltd Cl A Exchangeable Ltd Vtg Shs (BAMR)
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Brookfield Asset Management Reinsurance Partners Ltd. Class A Exchangeable Limited Voting Shares (BAMR)
Q: Further to previous questions on BAMR
BAMR has an outline of the characteristics of BAMR which after review makes BAMR different that the previous Brookfield spinouts (i.e. BEPC and BIPC)
https://bamr.brookfield.com/stock-and-distributions/tax-information
BAMR is a Bermuda Corporation, not a Canadian Corporation
BAMR is considered a foreign holding requiring reporting under T-1135
BAMR dividends are NOT Canadian Eligible Dividends
This information was not well presented during the initial spin out and came as a bit of surprise to me after review.
Thanks
BAMR has an outline of the characteristics of BAMR which after review makes BAMR different that the previous Brookfield spinouts (i.e. BEPC and BIPC)
https://bamr.brookfield.com/stock-and-distributions/tax-information
BAMR is a Bermuda Corporation, not a Canadian Corporation
BAMR is considered a foreign holding requiring reporting under T-1135
BAMR dividends are NOT Canadian Eligible Dividends
This information was not well presented during the initial spin out and came as a bit of surprise to me after review.
Thanks
Q: I was given TOI shares for owning CSU. I am not selling, but when I do , what is the capital gain on the shares? Is it 100% because they were free? My bank shows them as all gain.
Q: Hi Team,
I have owned IPL for 18 years now and have incurred a loss over that period. Regarding the purchase of this company by Brookfield Infrastructure; if I accept their offer (cash/stock etc.) am I still able to claim my loss as a capital loss even though in my mind no real disposition has taken place? I cannot find succinct enough information on this in order to make my decision.
Thank you so much,
Dean
I have owned IPL for 18 years now and have incurred a loss over that period. Regarding the purchase of this company by Brookfield Infrastructure; if I accept their offer (cash/stock etc.) am I still able to claim my loss as a capital loss even though in my mind no real disposition has taken place? I cannot find succinct enough information on this in order to make my decision.
Thank you so much,
Dean