Investment Q&A

Q: In your response to Stephen you state that ZWH in a RRSP incurs a non-recoverable US withholding tax on the dividend - I hold ZWH in a RRSP and receive $0.095/share/month, the same amount as stated on the BMO website. Am I missing something here?
Thanks

Q: Good morning, If I sell ZWH, VGG and VIG in taxable accounts and replace with ZWA and VGH (both hedged and in Cdn dollars), will this trigger the disallowed tax loss? i.e. are they too similar to replace within 30 days? If so what would be a better solution? What would be your suggestion for US representation at this time?
Thanks for your never ending help.
Ted

Q: Hi 5i,

I'm thinking on adding ZWH 5%-10% to my RRSP to cover my US exposure. This is for a income portfolio.
My portfolio now consist of 50% GIC's and
5% in each of the following stock.. BNS,EMA,ECI,ENB,SRU.UN,BCE.
10% in CDV.
Can you suggest another ETF that would fit better then ZWH? Or would you consider ZWU a better position. I see 5i income portfolio doesn't have any US equity holdings.
Would the US dividend be tax excempt within the ETF?

I look foreward to your answers.
Thank for all the excellent info!!

Q: A couple of years ago a guest on BNN stated that when a Canadian citizen has over $100,000 IN U.S. stocks, they have to inform the U.S. government. I this is so how does one go about telling the correct U.S. government department ? Thanks.

Q: Comment: If it's not "fair" to pay taxes when you withdraw from an RRIF, it's not fair to avoid the taxes in the first place. The trouble we all have in calculating our net worth is we forget about the taxes! The tax deferral just doesn't work as well for those of us with high incomes in retirement. I expect there arr many who think that's a good problem to have!

Q: Have a family member that needs to supplement her monthly income. She received $60,000 recently.Should she use a investment brokerage account buy dividend payers, collect monthly income she derives from that and pay the occurred taxes, or since she does not have a TSFA open one and then (can she) withdraw the monthly dividend from the tsfa tax free on an on going basis. There is investment knowledge in the family to assist her. Thanks you for all your help

Q: Being 73, I saved most of my life to an RRSP which flipped to a RRIF @71, with mandatory withdrawals. In the process of doing estate planning, and with the RIFF, being taxed @50% of withdrawals which is a difficult pill to follow. Initially I was withdrawing cash, however after further consideration, this year I transferred loss position "Crescent Point".
1. Would it be best to try and tsf everything before you expire and pay the tax.
2. When you tsf, is it best to tsf your losers initially, and then the winners.
3. I assume there is no other means of elevating the tax on RIFF.

For sure, RRSP are great during your working years, but never considered the tax burden after retirement. As an example if you have a 1 million RRSP after taxes $500,000.00 Does not seem fair
Look forward to your rely and thanks for your service
Rick

Q: Re my previous question of Mawer funds in a TFSA, your answer seems at variance with the advice from Mawer.
Mawer advises that:" Mawer mutual funds are structured as a Canadian Mutual Fund Trust.Foreign holdings inside the fund are not classed as foreign holdings for withholding tax purposes"

Q: Hi Team,
When selling to open a put option position that expires in Jan 2018, is the premium received to be reported in 2018 tax return assuming it expires worthless in 2018?
Thank you.

Q: I would like to place some Mawer fund that is mostly in foreign stocks into my TFSA. Are there any withholding tax implications?
Thanks for your answer. HD

Q: Hi,
Further to your reply: "ENB pays its dividend in Canadian dollars. You could buy it in the US, in a US account, and dividends would be converted, but you would incur exchange fees.
Rather than looking at this strategy, we might instead holding some US exposure in general, for general diversification, and avoid trying to predict currency movements"

Since I'm seeking USD income, I'm looking for the biggest bang for my buck (so the Dividend Tax Credit is something I would want to take advantage of). Would my strategy work with something like a ENB.PR.U (USD preferred)? Or does the same currency conversion issue occur. Thanks again.

Q: If i own this in a tfsa will I have to pay tax on the interest?

Q: I apologies; I mis-phrased my question. The DRIP investments would be in addition to the TFSA and RSP investments (in different securities). As I understand things, a DRIP with a company sponsored plan such as TRP thru Computershare cannot be held inside a registered account. Is this correct? If so the $5k position in the non-registered (DRIP) account would not amount to a $25k per stock concentration and I believe the dividend tax credit would be useful since the account is non-registered. Thank you for your suggestions and service. I like your suggestions but a little surprised that a utility such as FTS was not recommended. Is there a reason you would not suggest a utility DRIP for a long term hold? Jim.

Q: Re Jim's question 26th June about his daughter's RSP & TFSA.
Don't think she can get the dividend tax credit if shares are held in these accounts. Did I miss something?

Q: I am considering making a rather substantial (for me) investment in Energy Transfer Partners (symbol ETP). I am however concerned about the fact this is a USA Limited Partnership. I'm wondering if the distributions might be subjected to any withholding taxes or if I might find myself needing to file one or more USA Income Tax Returns, in the states within which the limited partnership operates? The investment will be made within either my RRSP, my LIRA or my TFSA account. I am considering investing up to $50,000.00 in this entity and so would very much appreciate any advice you may be able to offer regarding potential tax or regulatory hurdles I might face today or in the future, as a Canadian citizen making an investment in a USA domiciled Limited Partnership. Thank you.

Q: You recently answered a question on these... would the distribution be income or dividends? Would any be okay in a tfsa or better in an rrsp or non-registered?

Q: Could you confirm that dividends of companies domiciled in Canada, regardless of the exchange they are listed on, and paid and received in US dollars still qualify for the Canadian dividend tax credit? As such, I assume that there would not be any US withholding tax (non-reg accounts). It would only be the US dividends from US corporations that would have 15% withheld?

Thank you.

Paul F.

Q: Is there a way to determine whether the dividends paid out by a company will be taxed as income or will receive the dividend tax credit, in an unregistered account? for example: enb.to, enf.to, bep/un.to, bip/un.to, bns.to, ala.to, bce.to, eci.to, etc. I am looking for solid companies with growing dividends where these dividends will be taxed more favourably as dividends and not income. Would you have a list of suitable companies? Thank you.

Q: Hi 5i,
My understanding is that if I buy units in a flow-through shares partnership, I can’t sell them until they are rolled over into a mutual fund, 1-2 years after the partnership is established. My question is: if I were to buy the flow-through shares themselves, direct from the issuing company, would there be any similar minimum holding period, during which the shares would not be tradeable, or at least not without transferring away the flow-through tax benefit? Thanks!

Q: I have stayed away from LP stocks due to worries about tax issues. Do you have any general comments on LP stocks? for example, If one holds BEP.UN on the TSX, should one purchase it in a registered or non registered account? Are there tax concerns....or is that only a problem if one purchases on the US stock exchange?

Thank you so much for your comments on this issue.