Investment Q&A

Q: Is the following true for holding the ETF ZID within a non-registered account:

- Does not have to be declared on the T1135 form.

- Distribution may contain Return of Capital (ROC) which itself is not taxed, but does affect the ACB of the shares.

- Distribution may contain (non-eligible?) dividends.

- Distribution may contain income which is taxed at the same rate as ordinary income , but at the highest marginal tax bracket.

- Distribution is not grossed up (i.e. the dreaded negative effect on OAS).

Q: I've owned TD for over 30 years and am sitting on a large unrealized capital gain. I know this is a great "problem" to have but I resent paying up to 33% tax on any sale now that the feds have upped the tax inclusion rate to 2/3 from 1/2. I took all the risk but lose close to 1/3 of the reward.
Can you suggest any way to mitigate/reduce any tax hit if I were to dump my TD shares?
I hate to say it but I suspect that this issue will only increase (i.e. next step will be 75% inclusion) as the feds look to gouge people to cover their horrific fiscal ineptitude.

Q: About taxes: Do you see any tax problem in buying FINB BMO S&P 500 (USD)
ZSP.U in december 2024? Is it better taxwise to wait for the beginning of 2025?

Q: I’m have some non registered stock investments that have capital gains. I was looking to make a donation to a charity using these to offset a tax on gains, as opposed to simply donating cash from cash flow. Is there anything to stop me from simply donating my stocks and then simply buying them back again, essentially to erase my tax burden?

Q: Are there US withholding taxes associated with the ETF's that are offered by Vanguard Canada (or any other Canadian ETF issuer) that pay a USD distribution??
Thanks

Q: Would tou confirm the last trading day for tax-loss purpose, Canadian and US ?
I’ve seen Dec 27 and Dec30 also (new settlement date?).
Thanks a lot. Great holidays to you.

Q: Hello,
I’m not sure if this question is out of scope. However my daughter and son in law are moving from Switzerland to Canada in the new year. They have some questions regarding their investments so I thought I would see if your team can help with answers.
- We have UCITS Irish domiciled ETFs so that we don’t have to pay US withholding tax - are these available in Canada?
- If not, are there any options to invest in for example an S&P 500 ETF (or other US ETFs) without having to pay withholding tax?
- do you have a brokerage account that you recommend? We currently use CornerTrader/CornerBank but they are not present in Canada so we have to switch

Q: Would any of these ETF's have year-end distributions?
Is it a good idea to just wait until the new calendar year now, to start a new position in one of these?

Q: Barry Ritholtz: Some investors have big, concentrated equity positions that have accrued big gains. Maybe it’s due to employee stock option plans. Perhaps they have some founder stock from a startup. Maybe there was an IPO or a takeover.

But suddenly they find themselves sitting on an uncomfortably large percentage of their portfolio in a single name. The challenge for investors is how can they diversify when selling shares leads to owing big capital gains? What’s an investor to do?

I’m Barry Ritholtz and on today’s edition of at the money we’re going to discuss how to manage concentrated equity positions with an eye towards diversification and managing big capital gains taxes.

To help us unpack all of this and what it means for your portfolio Let’s bring in Meb Faber He’s the founder and chief investment officer of Cambria. The fund runs 15 ETFs and manages nearly 3 billion in assets. Their new ETF is coming out in December 2024: The Cambria TaxAware ETF – symbol TAX – is a solution to address just these challenges of concentrated positions.

The above quote is intriguing. If I understand it correctly It will allow a tax deferred diversification from a single holding with large capital gains. It hardly seems possible. If I read this correctly, will this etf be available for Canadians? How do you view it?
Thanks

Q: Hello. I don’t understand how the US holding tax works, what it is and how it affects my portfolio. Can you please explain it to me. Thanks.

Q: Hi 5i,

For a US ETF in a non-registered account, would it be more tax efficient to hold HXS because it doesn't pay a distribution, versus ZSP which does? Would you recommend ZSP over HXS for any particular reason?

Thanks

Q: If I borrow to invest in a Canadian company that does not pay dividends,but has the potential to pay dividends in the future,is the interest cost still tax deductible?

Q: Question today from Indra, regarding taxes on ETFs purchased late in the year.

I'm a bit confused. My understanding was that Mutual Funds purchased late in the year did indeed become subject to income taxes accumulated by the MF during the entire year....but ETFs were not and therefore you could purchase them anytime throughout the year.

Please clarify....thanks for your help...Steve

Q: Is it advisable to buy an ETF so late in the year
I remember?? reading an article regarding taxation on distributions, namely that you are taxed on the total years distributions, even though you have not received the entire years distribution if u purchase late in the year
Appreciate any clarification you can offer on this
Or should I wait till January 2025 to purchase?
Thank you again

Q: I am looking to sell $100,000 in VFV (it is up ~70%) in a NR account to pay off debt. My income this year is $250K and I have already have ~$40K in capital gains this year. Does it make sense to sell it now or wait until January 1st to defer capital gains tax?

Q: Concerning limited partnerships like Energy Transfer , your suggested this lately: "there is withholding tax on distributions plus a 10% tax on proceeds from dispositions. In addition, there are multiple US forms that need to be filled out’".I do own the ETF AMLP in my RRSP ,and just received the dividend : there was no witholding tax or any other taxation , and the dividend did match exactly what is announced.Any explanation, plus are there forms to be filled out ?

Q: On Friday, I mistakenly sold a full position (sr. moment) in a margin account that will result in a huge capital gain. The intention was to sell half a position. On Monday, I intend to buy back half of the position realizing the price could be different from what it was sold.

Question. For tax purposes, how do I calculate the cost of this transaction? Will it be FIFO or simple cost averaging?

Thanks for your help.

Q: LPs are Taxed heavily in Canada, but is that true if bought in a RRSP or RRIF? Thanks

Q: Posted Nov 19th the 5i Stock Screener Canadian Stocks for Tax-less Selling (2024)
screened PBH as a company that meet the required criteria to sell before the end of 2024. And then on Nov 28 based on a question from a member, PBH was a stock identified for income/ dividends names, as you prefer to stick with high-quality companies with a long-term track record of consistent growth in dividends and a strong balance sheet.

Why do you suggest to sell the stock on Nov 19 and then on Nov 28 you suggest to buy the stock? Given that own this stock, and considering to sell my position for tax loss purposes, can you please clarify your position?

Thank you.

Q: Greetings:
If I hold shares of the same company in a RRIF account, as well as in 2 separate non registered accounts, and I sell some shares in the non registered account-- do the shares in the RRIF enter into the calculation of the average adjusted cost base for calculation of my capital gain or loss?

Thanks, Ben.