Investment Q&A

Q: Hi,

I was surprised to learn yesterday that a T3 form was provided to me from by bank for holding Purpose High Interest Savings Fund (PSA). It says there is a minuscule return of capital. I thought PSA would only provide interest as reported on a T5.

I went to the PSA website and sure enough, there is a ROC and has been since 2013. Do you know if this is typical of these high interest savings account ETFs and if there is another fund that is similar to PSA without the ROC component?

Thank you.
Michael

Q: Hello. I was going to ask you about MSTY:US, one of YieldMax ETFs. It creates synthetic long exposure, then writes covered calls to generate income. I specifically wanted to ask you about how distributions would be treated from a tax perspective as a Canadian. The distributions are options premiums. So would the distributions then be treated as capital gains, or as US dividends? I assume there would also be a 15% US withholding tax.

When I entered the symbol to ask this question, I discovered that MSTY:CA is a Canadian equivalent, although they only have 50% exposure. Do you know anything about the company Harvest? I had never heard of them. Are they an established and reputable company? How would distributions from MSTY:CA be treated from a tax perspective? Thanks for your help

Q: Thinking about Martin’s question ( March 19) and your response, specifically on ROC. I own UMAX in a RRIF. I Look at its 14% yield as more than enough to cover the approximately 6% ( and rising) mandatory withdrawal, thus not negatively affecting my cash flow. I also see the ROC as lowering my unit price and thus the mandatory withdrawal amount. Is my thinking right on this ? Thanks. Derek.

Q: Hello 5i Team
If I own shares of BRK CDR of greater then $100,000 in my RRIF account do I need to fill the T1135 form?
Thanks

Q: Hello, looking at UMAX, the price went from 16$ to 14$ in less than 2 years. Is it because the NAV is going down because of the dynamics of covered calls? Sould we expect a steady price erosion for the foreseeable future? It’s nice to have 13+% annual distribution but if we have a corresponding capital loss, I am not sure it makes sense. Can this ever be a long term hold? Thanks.

Q: What are the tax implications for Canadian investors relative to AGNC. I believe they are an investment trust. It is my understanding that all USA based trusts have negative tax consequences, such as 30% withholding tax and 10% tax on all proceeds of any sale of shares. Not protected in RRSP accounts. Is my information correct.

Q: Hi, I enquired earlier about the double whammy of withholding taxes on some Chinese etf like FXI. Are there any CHINA broad etfs that don't have to pay this double tax?

If not, are there any other options? Are there CDN etfs that dont pay the double tax?

Q: Hi,

I’m following up on recent questions about taxation of the ETF VEQT (and similar) in an RRSP.

I am a bit confused about what withholding taxes might apply to VEQT. I have three questions please.

1) Would you be so kind at to explain what withholding taxes apply to VEQT in an RRSP?

2) If there are non-recoverable withholding taxes on VEQT in an RRSP, can they be quantified?

3) Finally, if there are withholding taxes applicable to VEQT in an RRSP, is there an ETF setup with the same diversification objective as VEQT that is more tax efficient in an RRSP?

(I tried following this information but I’m still unclear: https://www.vanguard.ca/content/dam/intl/americas/canada/en/documents/WithholdingTax_Guide-final.pdf).

Thank you very much.

Michael

Q: Where to easily find receipt for membership fees for taxes please.

Q: Hi 5i:
My question is about ETF EQLI, an S&P equal weight ETF that also writes covered calls. This ETF trades on the TSX in CAD but tracks a US index. Would the income generated by this ETF, if held in a TFSA, face the clawback from the US government even though it trades in Canada?
Thanks,
Murray

Q: 5i
Is there a 15% withholding tax on these two ETF's within an RRSP if they are purchased on the TSX ?
Thanks
Bill

Q: Do you know what the tax consequences will be for Veren shareholders? I see no mention so I am assuming that this will be a taxable event. I'm hoping that as a merger it will not result in capital gains taxes but just an adjustment to the ACB.

Q: Would you have a proxy for HPS.A, TFII, BN, NTR, ILMN or just wait out the 30 days?

Thanks for your service!

Q: How is a DRIP for VBAL advantageous for an investment in an RIF? Would it not be beneficial if the market value or the number of units increased rather than the cost base? I don't understand why my financial adviser would set this up. Please help me understand this investment in a registered account. Thank you for your invaluable service.

Q: Let’s talk taxes … According to prior Q&As , subscription to 5i Research would be tax deductible. If I subscribed to a Bundle including CMS and ETF/Mutual Fund , I assume only the basic amount (now $250+Tx) is tax deductible?
I do not subscribe to Portfolio Analytics but same question could be of interest to the members.
Thanks.

Q: For Margot,

Instructions for printing tax receipt can be found on the forum

https://www.5iresearch.ca/forums/viewthread/643

Q: Do US stocks held in registered accounts e.g TFSA & RIFs count as foreign property for Canadian income tax filings? What about CDRs?

Q: Regarding the superficial loss question that V asked on March 5, in his case since they bought the stocks on Feb 3 and sold at a loss on Feb 10 ( i.e. less than 30 days), would it imply superficial loss by default?

Maybe they could buy the same stock again and adjust their ACB? What would be the rule that apply in this case regarding ACB adjustment, number of days, etc... ?

Q: In my non-registered account, If I buy 10 stocks of XYZ (new to the account )on Feb 3 and sell all 10 stocks at a loss on Feb 10. when is the soonest that I can buy the stock again to avoid superficial loss?

March 13 is 31 days after Feb 10.
April 5 is 61 days from Feb 3.
April 12 is 61 days from Feb 10.

My confusion stems from the 60/61 day restrictions. I understand the 30/31 day restrictions.

Also, if I still own XYZ in other accounts (TFSA, RESP, RRSP), could such a sale be considered superficial loss?

Q: Good Morning, to the best of your knowledge do any of the Brookfield companies require a T11135 to be filled out?