Investment Q&A

Q: If I own a stock outside of my TFSA and then buy the same amount of this stock inside my TFSA for twice the price is my adjusted cost base equalized between the two holdings?
IE 1 share = $1 outside TFSA
1 share = $2 inside TFSA

Is my cost base now $1.50 on 2 shares?

TIA

Q: if I sell a stock at a loss can I repurchase the stock 30 days later and still take advantage of my tax loss? brenda

Q: We are recently retired with no pension but would like to get the $2,000 each pension credit in this and future years. What are your thoughts (pros and cons) please on purchasing a say $100k annuity, which is roughly 10% of our registered savings. Thank you.

Q: If you could give me your thoughts on these 2 etf's RSX.US and FXI.US, as they seem to be cheap, and they pay a decent dividend. Russia seems to be a play on energy and going through a recession, and China a play on manufacturing, also slowing down, can these two countries be added to a portfolio for growth long term(5-10years)? Your thoughts! Also will I have to pay 15% withholding to the Americans for these 2 country specific ETF's, and is their a way to avoid paying the Americans dividend withholding for other country specific ETF's?

Q: Recently Peter's response to a member question mentioned CAR.UN as a decent choice for a REIT for good income and growth prospects. That's got me started thinking about adding REITS to my non-registered account.

However, I am not educated about the tax implications of owning Canadian REITS in a non-registered account. Is income from CAR.UN an eligible dividend to qualify for the dividend tax credit? Or is it treated as straight income that is fully taxable, or are there some other form of tax treatment that is done with income from Canadian REITs?

If eligible for the dividend tax credit, are there other Canadian REITs that look attractive from a growth, income and favourable tax treatment perspective?

SGR

Q: Further to Cheryls question about canadian companies that pay us dividends. If you move those shares to a us acount, will withholding tax of 15 percent be applied? Or not, as they are canadian companies.

Thanks for all your hard work.

Wes

Q: If I buy an country specific etf listed in the USA like the ones mentioned do I still have to pay the 15% dividend withholding tax to the Americans if the dividend is coming from non USA companies in a non registered account? Moreover, your opinion on both etf's

Q: I am attracted to the 5+% dividend and also the growth possibilities of BIP.UN. For LPs such as this are special filings required of the shareholders? Looking forward to your BNN appearance today. I am enjoying the new website and appreciate your unbiased opinions. Many thanks.

Q: This could save a lot of pain for fellow 5i members: If you hold U.S cash outside your RRSP and your TFSA... (A) the gain is calculated by subtracting the CAD value of the ACB from the CAD value of the proceeds (B) the buy and sell generate a deemed disposition of U.S cash that must be reported. It had a big effect on my taxes. None of my friends understand this, so it's likely many here have missed this. Because the exchange rate is now far from 1.0, CRA is now looking at that. You can see an example here: http://www.adjustedcostbase.ca/blog/calculating-adjusted-cost-base-for-foreign-currency-cash/. You can go to the tax section of the forum to ask questions.

Q: I read the response on the dividend tax credit. Just to clarify if you have BEP.UN in an RRSP account none of this matters. Correct?

Q: In my Qtrade account, under history, I get the entry "RTN OF CAP" every few months on equites such as VUN (an ETF). Can you tell me what this signifies? There is no cash or share values under the same entry.

Q: i am a novice investor an am wondering if you can sell a stock inside a tfsa and claim a loss on your tax return thanks

Q: Borrow from heloc to fund tfsa - good idea or not?

Age 56, wife 46. Mortgage free, no other debt; rrsp's maxed out; my tfsa funded to about $30k (with $400/month ongoing contributions), nothing in my wife's. Thinking of borrowing approx $55k from home equity line of credit at prime + 0.5% ( ie 3.2%) to fund balance of my tfsa as well as my wife's to invest in blue chip dividend stocks for long term hold (currently have BNS, FTS, ENB, BCE, TCP, HR.UN, etc). Idea being the maxim that it's not timing the market that matters but rather time in the market. At current 3.2% rate of interest with seemingly little risk of dramatic rate run up anytime soon monthly carrying cost is approx $145 which is not a problem from a cash flow standpoint. Pay off heloc over time as cash flow allows. I realize by using funds for registered accounts we lose the interest tax deduction as well as any potential capital loss carry-forward (hence preference for blue-chip dividend payers). Thoughts re this borrowing strategy or the investment strategy? Anything different you might suggest? Thanks for your insight.

Q: Regarding your previous answer to someone regarding holding US dollars in TFSA. I have been thinking of selling US options in the TSFA, in order to get tax free US dollars. I have done very well in CSU and need to trim it back and have been thinking that I would try selling US options on the returns. Do you see any probelems with that strategy?
thanks

Q: I notice that you sometimes suggest/recommend that subscribers or their young dependents purchase U.S. $ denominated stocks in their TFSAs. I would love to but I don't. The reason -- taxes. Both in the short term and with age ( I am almost 80) am learning the hard way the implications of the T-1135 and the joy of U.S. estate taxes. If I had the chance for a do over, I would put as much of my U.S. equity holdings in my RRSP as possible and later convert to a RIF. Start using the TFSA for a some Canadian dividend grower. Publish if you wish. Thanks for all you do. Bill

Q: Scanning the news and reading your blog post, I can't find any mention of the "foreshadowed" change to tax rates for capital gains and/or dividends. Did I miss something?

Q: Followup to recent Q. on BEP.UN. Distributions can be taken in US or C$, default is US, so if held in a C$ account broker will convert at their exchange rate. To receive in C$ you must instruct broker you want this option, I estimate it's worth at least 1% of the distributions received, not much, but better in my pocket than broker's.

Details at bottom of page here:

https://www.brookfieldrenewable.com/content/investor_relations/distributions-30413.html

Q: For companies with US dollar distributions (such as BEP.un and TRI), is it better to hold them in registered or non-registered accounts?

I am under the impression that companies with distributions in US dollars are better held in registered accounts, to avoid the US withholding tax. At the same time, dividends from Canadian companies are taxed preferentially if kept in non-registered accounts.

What should I do with BEP.un and TRI?

Thanks for this tremendous website and service!

Q: I have a 4% weight in CM in a portfolio heavily weighted to financials. I have already crystallized some capital gains this year and was planning on waiting till next year to sell my remaining position in CM, proceeds to liquidate an investment loan. I have heard that the upcoming budget may change the tax hit to capital gains from 50% to 100% which would speed up my plans to sell prior to the budget announcement.
Based on your connections do you think it likely that the Liberals will make this change?
What is the date of the Budget announcement?
CM go s ex-dividend on March 23 so when can I sell and still get the next dividend payment? i.e. Is ownership for dividend purposes based on the selling or settling date? If settling date than could I sell on March 18 which would settle on March 23?

Q: Could you speculate on the Canadian budget, in particular on the possibility of an increase in the capital gains inclusion rate? I do appreciate very much the service you provide. Thank you.