Investment Q&A

Q: Hi Peter...I am 69 years old. My thoughts on my RIF withdrawal strategy are to first take out any cash collected from the dividend paying companies which get me to about 50% of the minimum withdrawal. The next step would be to transfer out Canadian or US capital appreciation companies into our margin accounts. I realize it could be argued it is best to shelter capital appreciation companies inside the RIF as long as possible so an alternative approach would be to take out Canadian dividend paying companies (like BNS or TD) first. However in the end it might be preferable to work down the RIF size to reduce a sizeable tax hit upon death. In spite of 2020 withdrawals and market gyrations my RIF grew by 11% over the year.
I suppose if the RIF is to go to charity upon my or my spouse's death it is best to maximize the RIF. Only take out enough money to keep CRA happy and suit one's lifestyle.
I know you are just a youngster (!) but any thoughts you have on this "ageing" topic would be appreciated.
Regards,
Jim

Q: Hi Peter
Am looking for candidates for my tfsa
Could you please rank these based on potential upside, debt and balance sheet.
Also, am trying to transfer USD from my TD Bank account or my TD non-reg USD account to my tfsa USD acct. It is not working -- am I not able to transfer my own USD into the tfsa USD account? ie. must I convert from the tfsa CAD acct? It is bizzare.
Thank you for your great support, very unique indeed.

Q: Happy New Year to all at 5i!!
In answer to John on Jan5 you said you would be reluctant to transfer LSPD to a TFSA because it would trigger a capital gain. I’m faced with the same situation and would like to understand your reasoning. My thinking is to transfer to the TFSA, pay some tax and get years of tax free gains in the future. Love to hear your thoughts.
Dave

Q: Hi, I am looking at topping up my TFSA with a transfer in kind from a cash account. I realize that doing so with a profitable holding will trigger a capital gain, so am wondering about transferring stock that I currently show a loss on. Granted it is a paper loss and I do not wish to sell the stock outright as it is NVDA. Would the same be true here in that I will trigger a capital loss, because technically the holdings are sold in the cash account and bought again in the TFSA? If so, then it seems like an interesting option - would you agree? Or is there an alternative you would suggest that is better? As always, your thoughts and input are greatly appreciated.
Happy New Year!
Dawn

Q: If I open an TFSA in my Wife's name and borrow from bank $75,000.00 (LOC)n my name to buy stocks ,, can the banks interest be deducted from my Annual salary or Cash account dividends as an expense.? I have my own TFSA. Is their such a thing as a "spousal" TFSA.
HNY...CEC

Q: In a taxable account, for a US ETF(ex: IEMG) with no US stock in it ,(bought alone or even included in a canadian ETF like XAW ) : is it considered as a US equity, and submbitted to the US withholding tax on dividends ?

Q: Feel free not to publish if I’m mistaken, but I would want to caution Keith (Dec 29) who said he might contribute his Nutrien shares to his registered account and would realize a capital loss in doing so. I do not believe that one can claim any capital loss when the disposition results from a contribution to one’s RRSP or TFSA. He would need to sell the shares in his non-reg’d account (and realize the loss) and then contribute the money if he chose, but should not then repurchase the NTR shares until 30 days has passed.

Q: A comment. The problem with dividends in a taxable account is that, depending on your other retirement income, the grossed up amount added to your taxable income can cause you to lose your oas. Maybe not an issue if your income is that high but still, something to think about. My rif has a lot of dividend stocks and enough growth stocks that I can make my annual rif payment in cash, generated by dividends, and a transfer in kind of growth securities with no dividend. I also deferred my oas to 70. Also, I believe capital losses are applied to net income so do not help reduce your income for oas eligibility.

Q: Could you tell me if because of these two mergers, were the original shares, ie, AD and POW sold to purchase units/shares in the new trust/company and thereby realizing a capital gain or loss? I cant seem to find this information from the DIY broker.
Thanks
Merry Xmas

Q: I am selling this stock in January from my margin account ( 40% leveraged). After the sale I intend to put the cash in my TFSA. My question is: will this have any consequence with the CRA in regards to investment expense with my margin account afterwards?
Thank you for the great advice over the years!

Q: Just curious, how would the CRA treat the Topicus spin out if CSU were held inside ones TFSA. Would the new shares count toward the yearly contribution room when they show up, or preferable like an attached dividend?
Thank you

Q: Hi, You already mentionned here that ZEM was more "tax efficient" than VEE, since "there is no US withholding tax" with ZEM. From what I can observe,VEE is only including emerging market stocks (and no ETFs or US stock), could you explain to me why VEE would be less "tax efficient" than ZEM ? Regards,JY

Q: 5i staff and readers might be interested to hear (and comment on) the outcome of my recent (Oct-Nov 2020) Nutrien tax loss sale/repurchase in a taxable account. When I sold my 2500 Nutrien shares for ~$137,000 (realizing ~$18,000 loss), I purchased (per 5i suggestion) an offsetting position in Mosaic (MOS.US, another fertilizer company). Over the next 30 days, Nutrien stock price rose significantly, and so when it came time to repurchase the Nutrien shares (after 30 day waiting period), they now cost $153,000, i.e., an increase in price for the 2500 shares almost as much as the realized loss (~$16,000 versus ~$18,000)! Fortunately, the Mosaic position rose in the meantime by ~$21,000, rescuing what otherwise would have been a disastrous tax-loss sale. In the end, I am now back in Nutrien (a long-term hold in my portfolio), but the whole round trip experience ended up with no tax savings (in fact, my net capital gain position increased by ~$3000 (i.e., ~$21,000 Mosaic share gain minus ~$18,000 Nutrien realized loss), making the whole effort unhelpful re: saving taxes. This tale illustrates well the potential peril of tax-loss selling. But thank you to 5i for the suggestion to hold Mosaic during the 30-day period, preventing a really bad outcome.
Ted

Q: I'm down 60% on all three of these and finally taking the tax write off. The good news is that I can use it this year. Would you consider any worth buying back again after 30 days or not ? QST has been showing signs of life recently and perhaps CXI will recover when the world starts to travel again ? What would you do ?
John

Q: I know you generally don’t advise making decisions in what “might” happen, but I need to absorb some capital gains in a non-registered account in the next 6 months and I’m thinking about the potential for changes to the taxation of capital gains. It would seem that taxing capital gains at a higher rate is a likely target to pay for some of debt that government is accumulating due to COVID. Should I hedge my bets and absorb some of the capital gains this year?

Q: Hi,
I have some questions about investing in a taxable account (non-registered) vs a registered account?
1) when to use registered vs non-registered accounts assuming money is borrowed (LOC or HELOC) where the interest can be deducted in personal income tax (high bracket)?
2) what is preferred (to lower tax) to use in case of non-registered account investment assuming one spouse (X) is in the top income tax bracket and the other spouse (Y) is low tax bracket? X and Y joint account or Y only account or X only? Again investment money is borrowed under HELOC (joint).
Thanks,

Q: The 30 day rule deals with a superficial loss not being allowed. However when the security is finally sold all losses are added to the final result. It appears that the loss only has a ti
me factor. Is this true and how does the rule apply to options.
thanks
THOMAS

Q: Good Morning: In a non-registered account that holds US companies (or ADR's) that pay a dividend, is the tax that is withheld seen as a credit for income tax purposes?

Q: Hi,
I hold ETFs (VRE XEC XEF XIC VUN) in my TFSA and RRSP. follwoing questions
1) Are there tax considerations /US-dividend withholding for any one of those?
2) Also, any specific considerations to use TFSA vs RRSP to invest in these ETFs? for example VUN should be used in RRSP.
3) are they good ETFs to investing in long term (8 to 12 years) for growth and income?

Thanks..

Q: What is the date in December 2020 that one can sell stocks in order to claim the gain in the 2021 tax year? Is December 30/20 the date ? Ty