Q: if held in a tfsa will american taxes apply to any gain if so at what rate
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Investment Q&A
Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.
Q: I have heard that at higher incomes dividends can be taxed more heavily than capital gains. If true, at what income point does it make more sense to hold dividend paying stocks in a non-registered account instead of in an RRSP?
Q: TFSA
I should only put Canadian investments in it.
If I put in US dividend stocks I will have an issue with the 15%
withholding tax.
I should only put Canadian investments in it.
If I put in US dividend stocks I will have an issue with the 15%
withholding tax.
Q: I did last year forex trading and have $300. loss do I follow same TAX rule as stock.
If you are not aware of forex rule can you please guide me.
Are you aware of any membership site for TAXES that can give the same service as you do for stocks.
I want to join your ETF membership do I wait until my renewal so both will expire same time or I join now and will expire both at the same time.
Do you have estimated time when you will have portfolio setup for ETF and do you have to be an ETF member to have access to ETF portfolio
Thanks for your help.
If you are not aware of forex rule can you please guide me.
Are you aware of any membership site for TAXES that can give the same service as you do for stocks.
I want to join your ETF membership do I wait until my renewal so both will expire same time or I join now and will expire both at the same time.
Do you have estimated time when you will have portfolio setup for ETF and do you have to be an ETF member to have access to ETF portfolio
Thanks for your help.
Q: I have a significant exposure to HCG which I want to reduce. I have been slowly selling some of my HCG shares the past few years, but I incur significant gains that I must pay taxes. My average cost is less than $3.00 per share. I was thinking of buying more HCG shares to increase my average cost and then sell within the year thereby paying less taxes. Do you think this is a sound strategy?
Q: Brad asked a question about avoiding companies that return capital as part of their dividend because of the tax reporting nuisance.
I shared his concern and determined the best option was to simply hold any REITS or Trusts in my RRSP. I thought this was the easy solution but let me know if I am missing something.
I shared his concern and determined the best option was to simply hold any REITS or Trusts in my RRSP. I thought this was the easy solution but let me know if I am missing something.
Q: Hi, I try to stay away from companies that pay dividends as return of capital, mostly because of the tax issues.
Do all investors who do there own taxes keep up on the ACB, as it is sometimes only a % of the total distribution? And do they even know if their stock has a ROC?
Also I don't get it,if the company cannot afford the high dividend and relys on ROC, why are they paying it in the fist place. 3 to 5 % seems about right, anything after that is a bit of a gamble.
What am I missing, seems like a complication I can do without,especially if you have 8+ stocks
Thanks
Do all investors who do there own taxes keep up on the ACB, as it is sometimes only a % of the total distribution? And do they even know if their stock has a ROC?
Also I don't get it,if the company cannot afford the high dividend and relys on ROC, why are they paying it in the fist place. 3 to 5 % seems about right, anything after that is a bit of a gamble.
What am I missing, seems like a complication I can do without,especially if you have 8+ stocks
Thanks
Q: I am having trouble finding the answer to my tax question. I hope you can help. My husband and I were joint owners of a rental building which we sold in 2016. There are considerable capital gains. I have realized capital losses from past years (from sale of shares)that I can apply to my portion of the capital gains. Can I transfer some of these to my husband to apply to his portion of the capital gains on the rental building? He does not have any capital losses. Thank you for your help.
Q: I notice that members often have questions regarding how distributions from their ETF/mutual fund are categorized for tax purposes. I have found the following website extremely helpful:
https://services.cds.ca/applications/taxforms/taxforms.nsf/Pages/-EN-LimitedPartnershipsandIncomeTrusts?Open
Here, one can access the T3 for every ETF available, and can see even a month to month breakdown for those securities that distribute monthly. Very helpful for reconciling ACB and completing tax returns. Please post if you think this will be helpful to other members.
https://services.cds.ca/applications/taxforms/taxforms.nsf/Pages/-EN-LimitedPartnershipsandIncomeTrusts?Open
Here, one can access the T3 for every ETF available, and can see even a month to month breakdown for those securities that distribute monthly. Very helpful for reconciling ACB and completing tax returns. Please post if you think this will be helpful to other members.
Q: I own this ETF an I am wondering about its behaviour especially taxwise. I received a dividend of about $500.00 at the beginning of this year. Then the dividend was subtracted as a drip but I didn't receive any shares for the drip. I think I read that it was simply reinvested in the pool. I question this as the price went down, not up. Also, this company sent me a T3 tax receipt stating that I had received capital gains of $531.00. It seems to me this ETF is acing very much like a mutual fund. I'd like your opinion please.
Q: Hi Peter I am confused of a writer yesterday saying he took funds from his RIF and moved them into his TSFA .The CRA rules that have been explained to me rightly or wrongly this is a no can do .Any withdrawals for a RIF or RRSP is a taxable event thus must be transferred in a cash taxable account first and then one can do what he wishes after the CRA rule is complied with.
Am I and the CRA wrong ?
Kind Regards
Stan
Am I and the CRA wrong ?
Kind Regards
Stan
Q: Hi team
I am a Canadian citizen residing in Canada
I have been investing in some US mutual funds that I bought directly from the US mutual funds, Fidelity Magellan and Vanguard Windsor 2
they do have a withholding tax for dividends and income
My question is that when I sell or redeem the shares in the mutual funds, am I subject to a withholding tax on the amount redeemed, (about 20-30%) and I was told that in order re-claim the withholding amount ;
I have to file a US income tax return and show it to Rev Canada to do so. if you have information, it would be helpful, thanks
I am a Canadian citizen residing in Canada
I have been investing in some US mutual funds that I bought directly from the US mutual funds, Fidelity Magellan and Vanguard Windsor 2
they do have a withholding tax for dividends and income
My question is that when I sell or redeem the shares in the mutual funds, am I subject to a withholding tax on the amount redeemed, (about 20-30%) and I was told that in order re-claim the withholding amount ;
I have to file a US income tax return and show it to Rev Canada to do so. if you have information, it would be helpful, thanks
Q: Hi Peter,
if I buy any US stock in my RRSP account and sell it on same day,will it effect on my tax?
or it would be ok with day trading on US stock in my rrsp?
Thank you
KT
if I buy any US stock in my RRSP account and sell it on same day,will it effect on my tax?
or it would be ok with day trading on US stock in my rrsp?
Thank you
KT
Q: Just doing my taxes and noticed the name of the T1135 form bears a similarity to that of the movie THX1138. For those unfamiliar with the reference, THX1138 is a 1970's cult SciFi drama about a Dystopian society of the future where mankind is suppressed by police androids and controlled through mind altering drugs.
Q: If I may be permitted a response to Peter's query regarding his conversion from a RRSP to RRIF, I would suggest it all depends on whether or not he will need income from his RRIF. I am strongly opposed to the notion that, just because a person reaches a certain age he/she should convert to a conservative portfolio. I'm almost 80 and since I don't need a lot of income from my investments, hold no bonds and except that dividends help to define a quality company, don't worry about dividends. My portfolio is based on the Balanced Equity portfolio from 5i with some diversification stateside and EAFE. My performance has been more than acceptable. The withdrawal requirements of my wife's and my RRIF have been met by transferring to TSFA and will continue to be until I run out of TFSA room.
Q: This is a follow up to a question I submitted a few weeks back that I should have been more specific about. I had asked about transferring our investments from the financial advisor we have been dealing with to a discount brokerage so that we can manage the funds ourselves and the relative pros/cons of transferring the investments "in kind" versus in cash. The transfer will involve a couple of RRSP accounts, a couple of LIRA accounts, a family RESP and a non-registered "in trust for" account. Any benefits/drawbacks of in kind versus cash transfer based on the type of account being transferred? We do plan to sell the bulk of our current holdings and start from scratch, but is that best done at the start or end of the transfer process - or does it really matter one way or the other? Thanks.
Q: Hello all,
This is further to the question regarding BIP.UN and tax reporting. I have had this equity for several years and it is always, without exception, the last tax form I receive. As of yet, this year's (2016) has still not arrived.
Having said that, it is a very small problem. Annoying, yes, but nothing more.
So, some final points:
1. It is probably not tax-advantageous to keep in a taxable account in the first place. (That was the only room I had available when I chose to purchase it - my bad.)
2. Kept in a TFSA, RRSP or other tax-efficient entity I don't believe the tax issues apply so if you have, or can make room, put BIP.UN (this would apply to BEP.UN as well, I imagine) in one of those vehicles.
3. We are in the process of moving our BIP.UN into our TFSA's each year until it is all in TFSA's, thus our tax issues become smaller each year until they will finally go away.
4. BIP.UN has been a stellar performer in our portfolios both in terms of dividend cash flow and capital appreciation - it would take something really dramatic for us to part with it. I guess it would be one of our "core" holdings.
All the best!
Cheers,
Mike
This is further to the question regarding BIP.UN and tax reporting. I have had this equity for several years and it is always, without exception, the last tax form I receive. As of yet, this year's (2016) has still not arrived.
Having said that, it is a very small problem. Annoying, yes, but nothing more.
So, some final points:
1. It is probably not tax-advantageous to keep in a taxable account in the first place. (That was the only room I had available when I chose to purchase it - my bad.)
2. Kept in a TFSA, RRSP or other tax-efficient entity I don't believe the tax issues apply so if you have, or can make room, put BIP.UN (this would apply to BEP.UN as well, I imagine) in one of those vehicles.
3. We are in the process of moving our BIP.UN into our TFSA's each year until it is all in TFSA's, thus our tax issues become smaller each year until they will finally go away.
4. BIP.UN has been a stellar performer in our portfolios both in terms of dividend cash flow and capital appreciation - it would take something really dramatic for us to part with it. I guess it would be one of our "core" holdings.
All the best!
Cheers,
Mike
Q: I am considering investing in BIP.UN & BEP.UN but have been advised not to on account of complex tax accounting & sometimes late reporting of the required tax info. If you or customers that have held these investments can offer enlightenment I will be grateful.
Thanks, Ian
Thanks, Ian
Q: This is in response to your answer to Stan(1) in regards to dividend income and DRIP plans.
I agree that taxable Canadian dividend income does not reduce the A.C.B. of the stock shares held, but then neither does the market value of the shares received under a DRIP. In fact the value of the shares at the time of the dividend payment is added to the A.C.B of your share holdings at the same time that you are credited with the additional shares. For reduce of A.C.B., are you not referring to "Return of Capital" which would be noted on the Corporate website under dividends/distributions and can be found in the appropriate box on your T5/T3 supplementary slips received each year.
R.
I agree that taxable Canadian dividend income does not reduce the A.C.B. of the stock shares held, but then neither does the market value of the shares received under a DRIP. In fact the value of the shares at the time of the dividend payment is added to the A.C.B of your share holdings at the same time that you are credited with the additional shares. For reduce of A.C.B., are you not referring to "Return of Capital" which would be noted on the Corporate website under dividends/distributions and can be found in the appropriate box on your T5/T3 supplementary slips received each year.
R.
Q: I often see posts about members saying they are down on ALA-tsx or some other dividend paying company and wonder if they should sell (nearsightedness).
I offer my approach for consideration.
I own ALA and every months when I receive a dividend payment my ACB is lowered. It is like getting some of my original $$ back.
The present dividend yield is 6.7% annually, paid monthly at $0.175/month.
So every month my cost basis is lowering. This is great in a non-taxable account such as a TFSA or RSP (also good in a taxable account).
Eventually I will have 100% of my original, out-of-pocket $$$ returned to me.
At that point in time, lets say we got to a $0.00 ACB for example purposes, then no matter the price of the stock and any dividend I receive the return is incalculable. This is because a dividend of say, $1.00 is an infinite return on a ACB of $0.00.
What % return is Warren Buffet getting on his long held KO, Coke shares? I suspect he is near the infinite, incalculable figure = pure 100% profit. Or is it 100,000,000%... percent profit?
--------------------------------------------
Example (with made up #'s):
ALA bought at $30.00/share.
Get 6 dividends totalling $1.05 ($01.175*6 = $1.05).
New ACB: $30.00 - $1.05 = $28.95.
** So if ALA is at $29.00 now the investor is still up $ 0.05/share ($29.00 - $28.95).
But in a taxable account the investor on paper is down $1.00 ($30.00 - $29.00) so they could sell @ $29.00 and declare a capital loss even though they have a gain in reality.
This is 1 way the long term investor get richer and richer without getting out of bed.
Hope this is clear and helpful to some one.
It is like with real estate income property in that once you have your original down payment returned all future incomes are 100% profit (minus normal expenses like hydro, insurance..).
Have a great and prosperous day/year.
PS. The other 2 great things I have learned over the years:
1. To not listen to the media, financial tv shows....
2. Once a person knows how basic Options & Shorting works they can make $$$ in any market (up/down/sideways) easily.
I offer my approach for consideration.
I own ALA and every months when I receive a dividend payment my ACB is lowered. It is like getting some of my original $$ back.
The present dividend yield is 6.7% annually, paid monthly at $0.175/month.
So every month my cost basis is lowering. This is great in a non-taxable account such as a TFSA or RSP (also good in a taxable account).
Eventually I will have 100% of my original, out-of-pocket $$$ returned to me.
At that point in time, lets say we got to a $0.00 ACB for example purposes, then no matter the price of the stock and any dividend I receive the return is incalculable. This is because a dividend of say, $1.00 is an infinite return on a ACB of $0.00.
What % return is Warren Buffet getting on his long held KO, Coke shares? I suspect he is near the infinite, incalculable figure = pure 100% profit. Or is it 100,000,000%... percent profit?
--------------------------------------------
Example (with made up #'s):
ALA bought at $30.00/share.
Get 6 dividends totalling $1.05 ($01.175*6 = $1.05).
New ACB: $30.00 - $1.05 = $28.95.
** So if ALA is at $29.00 now the investor is still up $ 0.05/share ($29.00 - $28.95).
But in a taxable account the investor on paper is down $1.00 ($30.00 - $29.00) so they could sell @ $29.00 and declare a capital loss even though they have a gain in reality.
This is 1 way the long term investor get richer and richer without getting out of bed.
Hope this is clear and helpful to some one.
It is like with real estate income property in that once you have your original down payment returned all future incomes are 100% profit (minus normal expenses like hydro, insurance..).
Have a great and prosperous day/year.
PS. The other 2 great things I have learned over the years:
1. To not listen to the media, financial tv shows....
2. Once a person knows how basic Options & Shorting works they can make $$$ in any market (up/down/sideways) easily.