Investment Q&A

Q: Hi 5i team, I would like to clarify the 30 day rule on loss selling. Hypothetically, if I buy say 300 shares at $1 and sell 200 at $1.5 ( gain of $100)and at a much later date say 1 or 2 years sell 100 at $0.5 (loss of $50).Will the last sell at a loss counted as loss selling? Thanks.

Q: Presently the family investments are about 80% Cdn stocks and 20% US stocks....excluding defined benefit pensions.
I would like to increase the US stock portfolio to 30% US stocks, using primarily new cash.

What I'm mulling over, pondering is this - what factors should I consider about taking US stock positions in TFSAs?

One that I'm aware of is that there is no recovery of US taxes withheld on US stocks held in a TFSA.

On the other hand, it seems the overall appreciation of US stocks is better than Cdn stocks, especially in certain sectors.

As the investments in the TFSA are to be held for the long-term, I am inclined to do it....take US stocks positions in the TFSAs.

What say you about doing it?.

Much appreciate your thoughts..........Tom

Q: I have owned WFC for a very long time. A shareholder class action law suit finally resulted in a small payout. How is this treated? Is it income or does it reduce the cost of my shares? Thank you for your answer, Cheers

Q: With respect to Shyam questioning your answer regarding US Tech stocks seeing tax loss selling in January. I believe the portion of your original answer that he is referencing related to selling tech stocks in January to crystallize capital gains, not losses, as a result of the huge run in tech stocks this year. The reason people will hold off selling tech stocks till January, both in Canada and US, is that it is the start of a new tax year and they may not want to incur capital gains until the new tax year starts. A corresponding drop in Tech prices may occur if this sell off is large enough.

Q: Hello, In response to one of the questions you had mentioned that US tech stocks may see tax loss selling in January. Does the US have different time for taking advantage of tax loss as opposed to Canada? Could you eleborate on this a little further. My understanding was tax loss selling usually takes place in Novemeber/December. Thank you.

Regards,

Shyam

Q: I have a non-registered account(all dividend)that I hold twenty positions with 50/50 US/Canada split. With My TFSA/RRSP being maxed, what tax considerations to I need to be aware of?

Q: What ETF's are available to a Canadian RRSP investor that are not subject to a US withholding tax on the US market holdings within that ETF? The added cost of HXS makes it virtually equal to ZSP with the US tax withheld so anything other than HXS. Thanks.

Q: In recent questions, you have recommended VEE as a Canadian emerging markets ETF. In the past, you often recommended ZEM. Is this observation correct? If it is correct, why do you now prefer VEE to ZEM?

For a TFSA account, would you still prefer VEE to ZEM? If I am reading the company information correctly, ZEM appears to be more tax efficient and has had a higher return over the last 5 years.

Your advice is most appreciated. Thank you.

Q: Thanks for the presentations at the Canadian Fin. Summit.

My question is regarding taxation of ETF's. I'd like to know if I understood correctly. I have VWO, GDXJ and ZID all in my RRSP (USD and CAD accounts respectively). Are you advising that they should be moved to non-registered accounts?

Q: good morning - further to a question last week about trading within a TFSA and limiting the number of trades to keep below CRA radar I am unclear on what constitutes a "trade". Is it buying and selling the same stock or does every purchase and every sale ( whether the same company or not) constitute a trade. Thanks

Q: In the past you published a list of tax loss candidates with the best upside. Could you please do that again.

Q: Hello 5i Team
I have reviewed previous answers regarding tax loss selling, however I cannot find a clear answer to this question.
I sold a stock on September 18, 2020 with the settlement date of September 22.
The thirty-day period from the trade date (September 18) is October 18.
The thirty-day period from the settlement date (September 22) is October 22.
What is the correct day I can re-purchase the stock and claim the capital loss:
1 - October 20 (settlement date October 22)?
2 - October 21 (settlement date October 23)?
Thanks

Q: I do not believe ZSP.U would be exempt from US withholding tax. Could you confirm this? If not what ETF's would be exempt from US withholding tax for a Canadian investor? ZSP is subject to US tax and worth about .24% and on a larger account significant. Thanks for your help.

Q: Hi, if an ETF with a relatively high distribution, say XEI, pays part of its distribution in ROC does that mean the underlying holdings of the ETF do not generate enough dividends on their own to cover the distribution? Thanks.

Q: Hi, could you provide any guidance as to the level of trading in a TFSA that the CRA would consider excessive? Thanks.

Q: Government uses previous year total income to determine if one is qualified for GIS (guaranteed incoming supplement). I would like to know if the GIS received from previous year is also included in the "total income" calculation? The Government of Canada site does not seem to be very clear. Thanks.

Q: Hello Peter & Team
For CRA purposes, can you please very this for me:
If I purchase a security in my investment/taxable account,
do I have to wait for 30 days before I can dispose of the security regardless of gain or loss ?
Thank you.

Q: Will there be a lot of selling pressure on the these stocks during tax loss season. Should I sell now and buy back at the end of the year.

Q: Further to Dave's question regarding the Raytheon spin-outs, once the CRA has granted them eligible under 86.1, they are not taxable until one ultimately sells them. But to elect to use the 86.1, you must file a letter with the CRA (done typically with your taxes, after you have received documentation from the company showing that this dividend (spin-out) was received, and that you are exercising this right under 86.1, to defer the tax due, until sold. Just google how to claim 86.1 cra eligibility, or taxtips.ca also has information on how to claim this eligibility. But most definitely, I believe that if you've received a T3 or T5 or similar, showing the spin-out dividend companies, you cannot ignore it, you must inform the CRA of your intention to defer.

Q: Hello 5I team,
I hear unless you investments in your TSFA are all Canadian, you would be subject to CRA tax.
Is this true?
What about ENB, a Canadian Co but with lots of USA income?
....Thanks ....JC