Investment Q&A

Q: Good morning, quick question. If I sell a bank share (say CIBC) at a loss and immediately buy a different bank share (say RBC) does the loss stand for CRA purposes? Do I have to buy outside the financial category if I want to ensure my capital loss from CI stands? Is this clear with CRA or am I best to wait thirty days before buying another financial? Thanks

Q: I am working on setting up an RESP for my Granddaughter. We have about 10 years to grow the RESP before changing it to a more conservative approach. Looking for 3 to 5 solid Canadian ETF's - one of them being the best to track the S&P 500. What 3 to 5 ETF's would you recommend for growth and diversity? I would like to keep dividends in Canadian dollars to avoid withholding taxes. Thank you, Patrick

Q: If I sell BIP,UN at a loss and buy BIPC would the loss be considered a superficial loss by CRA.
Thank you.

Q: Dear Peter and Ryan.

Thank for your great work. I have a full time job and receive T4. I am filing income taxes for some capital gain last year. I am wondering whether I can claim the membership subscription here as an expense to offset the capital gain. Where to fill the number if yes?

Thanks again,
Yiwen

Q: I intend to buy DIR.UN, IIP.UN and CAR.UN. I do not need the income, I would buy them because you have recommended them in the past and I need some diversification into the real estate sector. My question is, given that their distributions can be R of C, foreign income, and other income, are they best purchased in a TFSA or RRSP, rather than in a non-registered account?

Q: I have just opened a corporate non registered account. I have a fair bit of cash sitting there doing nothing. I do not plan on needing any for many years but in case of an emergency I do want access (as apposed to buying real estate and have to sell in a short time frame). From my research it seems best to invest into Canadian stocks/etfs as apposed to foreign which I also assume the US? Am I on the right track? I understand you are not accountants and certainly do not emulate to be. I also have a call into my accountant.

Q: Received some BIPC shares from my holding in BIP.un. At the beginning both were equivalent in $ but now the spread is between $3 and $4. Although both are in my TSFA, should a consolidated all in BIPC before the spread get bigger?

Q: The CRA just charged me 50% of the value of my SDX shares (which aren’t really worth that much )because they apparently aren’t on the TSX anymore and I hold them in an RRSP.
Please tell me that the same thing isn’t going to happen with the TSGI shares when the deal goes through with Flutter.
Thanks
Randy

Q: Can a stock be transferred in kind from RRSP to TFSA?

Thanks for the great service
Kevin

Q: Hello,
What are the pros or cons to holding US dividend payers (ETF's or Equities) in an RESP? Wondering about withholding tax issues on the dividends?
Thanks, Patrick

Q: 5i guys!
Taxation clarity.
TFSA; Mostly hold Canadian dividend paying stocks and ETF's on the TSX.
Hold a Canadian ETF with US stocks. Withholding tax applies I believe.

RRSP; US Exchange American dividend stocks and ETFs.
My fuzziness.
TSX listed companies that pay dividends in USD.
Ex. AQN. OTEX.
As a canadian company purchased on the tsx is this tax exempt under TFSA?
Or does it fall under the withholding rules as an American stock unlike RRSP's exemption.
*take another question credit*

If in fact exempt. Does Questrade convert for free. I am curious if I should allow the conversion since I purchase with canadian in my TFSA. Or save up the USD and perform Norberts Gambit once in awhile.

Really enjoying everything you have to offer.
Fantastic and many thanks for all the investing improvements.

Q: I noticed something incorrect in your response to Stephen's April 27 question about GWO/POW. You said that he would have to wait until May 13/15 to sell them and claim a tax loss because he last purchased shares in those companies on April 13/15. If he sells ALL of his shares in the company he sells, he does not have to wait until May 13/15. The superficial loss rule applies only if you hold shares in the stock at the end of the 30 day period following the sale. If you buy something and THEN sell it within 30 days for a loss, you can claim the loss as long as you don't hold ANY shares in that stock at the end of the 30 day period following the sale.

Q: In the recent past, the Federal Government has toyed with the idea of increasing the Capital Gains tax to 75%. With the amount of increased debt, I expect that this will come about in the next Budget or even before if that is possible. I know that the CG tax was introduced in 1972 and was increased and decreased several times since then. I am wondering if any of your members who are tax gurus would have an opinion on this. Would the Feds have a valuation day so that the CG would be taxed at 50% up to that day and 75% after that date? Or would they would just go with 75%?

Q: My question is what is the new cost base for UTX, now RTX?
I held UTX and then it spun off Carrier and Otis. With these spin offs, I thought my cost base would be reduced for the spin off values for Carrier and Otis. But itrade and also Globe & Mail still show the original UTX cost base. 
I read that the spinoff and merger where to a non-taxable events.....or that's I took it.
Any information you can provide me to clarify this situation......Thanks.....Tom

Q: Hi gang, from a tax perspective, which is better to have in a non-registered account, bond or guaranteed investment certificate? Thanks
Alnoor

Q: Hi there, just catching up on questions. There was a comment a few days back that the first $2,000 from a RRIF is "tax exempt" which is not correct. It is taxable but if you meet the requirements the first $2,000 allows you to claim the $2,000 pension credit which save you a flat 15% Federal credit - there is also a provincial credit which can vary - Ontario only gives credit on the first $1,463 so even someone in the low tax bracket (20% in Ontario) owes some tax on the first $2000 depending on other credits. If you are in a 40% tax bracket from other income you have, then the pension credit does not offset all the tax on the first $2,000 withdrawn. Just wanted to clarify the facts, thanks, Ed

Q: Further to Mark's question regarding the spin-off of Dow and Corteva, there is definitely a way to set this aside for this taxation year, and ultimately have it as a capital loss/gain. The CRA calls it Election 86.1, and I've included the link here to CRA's website, where they show that they have approved an 86.1 election for both companies mentioned.
https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/eligible-spin-offs.html
if you do your own taxes, google "86.1 procedures" or something similar to that, and you'll find all the necessary instructions. i've done it myself for the HP spin-off, and essentially, you include a letter with your taxes (or re-file if you've already submitted your taxes) and state that you are exercising this election, and thus will not be including that specific T5 with your tax return this year. And then keep that letter, in case when you eventually sell, if you ever have an issue.

But to this point, when a US stock gets close to a spin-off (in a non-registered account) I always sell, to avoid this hassle. And it is a hassle.

Hope this helps...

Q: In response to the question about DowDupont's splitting into 3 entities and the subsequent tax handling, the spin out is recognized by CRA as an
Eligible spin off and you can elect to defer tax implications and restate the ACB of the 3 spin offs to accurately reflect this. Below are some links that may be of use to you.

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/eligible-spin-offs.html



Defering tax

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/information-canadian-shareholders.html

Cheers
Scott

Q: I hesitate to ask because I find that some of your subscribers expect you to answer questions which are far from your stated ambit, but at the risk of being lumped in with them let me go ahead anyway. Would you know if the Government of Canada published a budget for 2020-2021, and if so, did it change the capital gains tax formulation? Many thanks.

Q: HI GUYS
Just noticed when i printed out my T5 summary of the AMLP ETF it lists the distributions paid on the 1st line as Return of Capital. I would have thought it would be listed on the 3rd line as Foreign Income.
Just wondering if you guys happen to know if i need to enter this on my tax return. After looking around on Intuit turbotax, all i could find was maybe report it as Foreign Income, but even under foreign income, there is no place for "return of Capital"
Thanks Gord