Investment Q&A

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

Q: I'm thinking of moving two stocks from my non-registered account across to my TFSA. My question is whether this transfer between two accounts is likely to trigger tax liability from CRA. At the moment, there is neither any measurable capital gain or capital loss for the two stocks in the non-registered account.

Q: If I sell CPD to harvest a loss and replace it with HPR would it be considered a superficial loss by CRA?
Thank you.

Q: In response to Rudy’s question regarding taking money out of a RRIF at 65. The 1st. $2000 from a RRIF is tax exempt. My wife and I both moved enough from our RSP’s to a RIF to take advantage of combined $4000. tax free annually. ( thank you Colin Ritchie)

Q: I have a question not related to the market or individual stocks. Thank you for providing a calming to all of us during these crazy times.
I am 65 years old and retired. I don't require funds from my investments as my pension covers living expenses. I am trying to reduce my RRSP account by withdrawing funds and putting that to my TFSA. I pay the tax. If I open a RIF and transfer a sum from RRSP, I can then SPLIT that income if I withdraw the amount to transfer to our TFSAs. My question is: Am I obligated to withdraw a minimum amount each year or not until age 71?
I could just ask my accountant, but thought maybe some other members would be interested in possible tax savings.
Thanks again for the great service you provide.

Q: I hold this in my Cash account (for income) and it is underwater (has been for a while). In your opinion, would I be better off to harvest the loss and purchase 2 or 3 individual top quality preferred shares? If so, can you provide some specific suggestions (I am overweight financials). I assume I would have to wait 30 days to purchase the individual shares to avoid the superficial loss?
Please deduct credits as appropriate.
Thank you.

Q: I have most of my wealth in an unregistered account and would like to invest in the safety of Bonds or GIC's but I don't like that they get fully taxed. Are there any ETF's or funds you would suggest that use derivatives or some other wizardy to turn Bond/GIC income into dividends so they are taxed more favorably? All without giving the advantage back through high fees or MER?

Q: I am a Canadian and have built up a good position in BPY.UN during this sell-off. Their website says their distributions are to dividends but Flow Thru (income) and taxed in the hands of shareholders.

They supposedly issue T5013s.

Is it better to hold in RRSP/TFSA or non-registered?

If I am borrowing to invest in a non-registered, do you think the interest can be written off taxes like buying other securities can be?

Thank you
Bruce

Q: Hi there,
Say one has 200 shares of company ABC. They sell 100 shares and 15 days later sell the remaining 100 shares. Can one repurchase the first 100 shares sold in thirty days without loosing the capital loss?
Tx.

Q: Is PHYS:CA best held in a TFSA or RRSP, advantages or disadvantages please?
Thank you

Q: I recently sold CDZ, XEI and ZDV for a tax loss and would like to re-purchased equivalent ETF's. Can you recommend appropriate replacements?

Q: I have CGL.C in my non rrsp account and do have a capital gain so I am thinking of selling this as I do have some capital loss that I can use it to offset the gain. I know you also mentioned that PHYS also has lower fees than CGL.C so would this be a good switch?
Thanks