Investment Q&A

Q: Hi 5i,
Are there any current or future tax disqualifications if I sold for example QSR at a small loss in a RRSP account (no loss tax benefit) to purchase @ the same price within a Non-Registered account exact same time? The reason is to take greater advantage of the div tax credit outside of the RRSP and reallocate the funds within the RRSP to more forced securities such as KXS or even some bond ETF’s. Basically, setting up for retirement & preserve RRSP funds. My concern on the future tax is if worst case scenario played out and the Non-Registered security (QSR) lost further ground a tax loss would be disqualified somehow.

Q: I hold XQQ in my RRSP. I read it is better to receive US dollar dividends via a NYSE ETF. ( tax free treatment ). Can you suggest a similar ETF to replace XQQ ?

Q: I am considering buying LIFE, or maybe HHL. I understand the "withholding tax" issue is best handled by having these ETFs being held within ones RRSP.

A clarification question = If the foreign country withholds income taxes, is this reconciled at the time of filing ones income tax? I thought there was a tax agreement or tax treaty that ensured there was no double taxation. So if one paid taxes to the USA on a certain investment, then you didn't have to pay taxes also in Canada...in other words...no double jeopardy. Or...is my understanding incorrect?

The reason I ask is I like the way my portfolio is constructed and have the funds available to purchase either of these ETFs from within my Cash account.

Thanks for your help...much appreciated...Steve

Q: What are the tax implications of owning bep.un in Canada?

Q: Hello I was wondering your opinion on this little alt meat company out of Victoria BC. They have only been trading since June 17 publicly before that the founders were on Dragons den and they did a crowd source on Frontfundr for 600k. Yesterday they did a new bought deal through Canacord for 5million. These funds are apparently earmarked for expansion in the US. I have personally tried a couple of their products and found it to be quite good even tastier than BYND (side note I still enjoy a good real burger and steak). Lastly this company has inked a few new distribution deals with grocers like Sobeys and increased their online "meat" club subs. My questions is with this new focus on the US market would it be time to take a chance or start a position.? To my understanding they are in the process of completing a new manufacturing plant in Vancouver to help meet their growing demand. Thanks as always.

Q: Hello 5i Team.
Point of clarification on your reply to Leonard yesterday regarding ZPAY. My understanding is that any dividends from this ETF will be subject to the with holding tax, which is then recoverable upon tax filing. If this is the case, then does it matter if this ETF is held in a RRSP or cash account, if the tax is recoverable?

Due to the options strategy of the ETF, what tax implications are there on any capital gains the ETF may incur?

Please deduct as required. Many tx for the continued help.

Steve

Q: i wish to withdraw dividends from my cdn holdings.
based on type of account, in what order should the withdrawals be made?
1 - tfsa
2 - registered or cash?
i will have losses to apply to the withdrawn income

Q: Hi 5i team,
I’ve recently sold some of my SHOP position in a taxable account (the share price has risen ~15-fold since purchase about 2-1/2 years ago, and even after this partial disposition, SHOP remains my biggest overall position—thank you for this excellent recommendation!). Now, I want to reduce the tax hit, and so I am planning to sell positions in BMO, BNS, and SU, with aim to rebuy after 31 days (to avoid superficial loss), as these 3 securities are core holdings in my portfolio. In general, when I do tax loss selling, I try to maintain an economic position in the types of companies I am selling, because I’m always anxious the shares will rise during the 30-day waiting period (indeed, frustrating increases in stock prices during the 30-day waiting period seem to happen quite often, at least in my experience). So, my question is: Can you recommend a security (or securities) to maintain economic exposure to BMO/BNS, as well as to SU, for the 30-day waiting period? (For perspective, I’m planning to sell ~$185,000 worth of BMO/BNS, as well as ~$72,000 worth of SU; when I rebuy BMO/BNS/SU, I would then sell the temporary holdings I bought to maintain the economic position.). Would you buy a Canadian bank ETF and Canadian oil sector ETF, to maintain these economic positions (and please recommend some appropriate securities), or rather other individual Canadian banks or individual oil companies (and please recommend some appropriate securities)? Also interested in your philosophical thoughts about how to handle the situation of tax loss selling, which arises every so often, especially now during pandemic, when there is wide variety of individual security performance (some big winners, but also some high-quality stocks that are—hopefully temporarily—depressed in price) as well as higher-than-usual volatility.
Ted

Q: Hi 5iTeam,
my question is a follow-up on a recent question raised by Ted regarding potential US estate tax liability on US situs investment. I remember a few years ago when Gordon Reid was on Market Call, he commented that even if one's US situs investment exceeds threshold of forty some US$ (I forgot the exact threshold amount) when one passes away, there will be no US estate tax payable unless the total value of the deceased's estate is over the exemption amount of US$11.4M. Would you please confirm if this is still the case.
Cheers,

Q: I am thinking of purchases of these 6 ETFs (or some of them). Would you see ZPAY, FCIQ, and FCUQ as being defensive? And back to the "where should I hold" issue: where would these 6 best be held for tax or other efficiencies: Cash account? RRSP? TFSA? Corporate account? Many thanks.

Q: There has been recent insider transactions
Please explain
70 - Acquisition or disposition (writing) of third party derivative

https://www.canadianinsider.com/company-insider-filings?ticker=NEO

Q: I have these three in my TFSA. I just read that holding QCOM in it is a potential problem due to the withholding tax. Is that also the case for MSFT and V. Can you explain the problem further and if it is an issue should I be transferring these stocks out of the TFSA and into a registered or open account? Thnks.

Q: Good Day 5I Team,
Your answer scared me. "We are not experts on US estate law, but we know the hit on death can be ridiculous, and the estate tax applies prior to Canadian capital gains taxes. Owning the Canadian fund will help with this"
Does that means all US ETF & US stocks owned by a Canadian resident are subject to a US taxes on his death ?
I uderstand your are not a Tax specialiste, but you please give me a link to learn more on this subject. Thanks. Best Regards

Q: Hi 5i team,
I would like to have emerging markets equity exposure within my RRSP. Currently, my RRSP holds mostly US situs securities in a U.S. dollar brokerage account (TD-Waterhouse). I am debating between buying VWO (trades in US$) or ZEM (trades in CAD$). I use Norbert’s gambit to convert between currencies, so doesn’t matter so much if I make conversion now (from US$ to CAD$, if I buy ZEM now) or later when I need to withdraw the funds (if I buy VWO now, raising US$ from sale of US$ securities already held, and later converting to CAD$ when funds required for RSP withdrawal). Any emerging markets ETF(s) purchased now would likely be held at least 10 years (potentially, much longer, depending on longevity—spouse and I are both aged 60). One other consideration; we are HNW situation, so US estate tax considerations potentially in play, too (depending on U.S. laws at time of our demise, and specific holdings owned at that time; this consideration would favor ZEM). My question—given the above considerations (currencies, fees within RSP, estate)--which one of these two ETFs would you recommend for long-term emerging markets exposure within an RSP (or, if there is another ETF you would recommend for long-term RSP holding for emerging markets, which would it be, given the above situation?).

Q: I am retired. To help me better appreciate what types of stocks to hold in my TFSA, RRSP/RRIF, and unregistered accounts, could you give me a few Canadian and US suggestions for each. Thanks again for your great service.

Q: Hi, my wife has some cash sitting in a Corporate account and we are looking to invest the funds in stocks. I know you can invest in ETF's, stocks, bonds, etc. but can you tell me what kinds of stocks are best to invest in, considering taxes, withholding taxes, etc. Is it better to invest in growth stocks or dividend stocks, US or CDN stocks? What are some other factors to consider? We are well diversified in our personal accounts and looking for long term growth. Thanks for all your help!

Q: If one were to invest in VXUS to cover off international equity exposure in a registered & TFSA portfolio; is it better (taxation purposes for eg) to place this in registered or tfsa?

Q: Peter/Ryan, I have held 50 shares of BEP for a while now with my original cost being 1576.30 and have noticed that the book value is 1335.84, and that it has been going down through the years, how is that. Is it worth holding, or do I lose if I hold on to it over time. Thanks

Q: What effect on BAM would the taxation of carried interest at normal tax rates be?
Thanks
Bob Rose

Q: Hi 5i Team,
I do not have any international exposure and I am wondering if you would recommend a dividend ETF with some upside potential. What account would it be best held in? Do you think this is a good time to enter? Thanks so much.