Investment Q&A

Q: I too have that black cloud over my trades, thus this question.
If I own 1000 shares in company xyz in my non-registered account, and have a loss I want to capture, if I sell 500 shares, and retain the other 500 shares, do I still get to claim the loss on the 500 shares I sold at a loss.
Thanks as always

Q: One of your correspondents proposed that the T1135 reporting threshold were based on "highest fair market value at the end of any given month." But this is not the case; see, for example, <http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/frgn/1135_fq-eng.html> which states that the threshold "is based on the cost amount. The cost amount is defined in subsection 248(1) of the Income Tax Act and generally is the adjusted cost base and not the fair market value."

It's worth noting, further, that "specified foreign property held in an RRSP or a TFSA is excluded from form T1135 reporting requirements."

Finally, it's possible that foreign securities held for the purpose of day-trading are also excluded (though the FAQ is rather vague on this point.)

Lots more useful guidance in this FAQ.

Q: Finding out whether or not investments are foreign, even if listed on the TSX, is only part of the fun.

Here's the CRA updated information for Form 1135 for 2014.
http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/frgn/1135_rprtng-eng.html

I had thought the old form wanted adjusted cost base but now they seem to be talking highest fair market value at the end of any given month. At least it's aggregate.
I'm tempted to just go with what my monthly brokerage statement deems as foreign, and that total ( which does not always agree with what I suspected was foreign, or with where head office is!) since that is the tax paperwork that the CRA will get.

Anyway, enjoy everyone. We all know that 5i is not a tax accountant service!
Marilyn

Q: Dear Gentlemen,
Your answer to Jim today : US based ETFs will get captured under the US tax reporting rules, where Canadians need to declare assets in the US above $100,000.
You had about same question, last year, I remember that you corrected your answer, I understood 10000$ by holding not in total
I am wrong ?
Thanks
Best Regards

Q: Current campaign for 3D TV supposedly to provide boost. Stock range bound at historic lows. Your opinion of potential?
Thanks

Q: Good Morning
Can you please tell me whether the following three securities are classified as foreign income and whether they have to be reported on Form T1135 ?

ALA.PR.U ENB.PR.U and 5.8% Brookfield Asset Management Bond maturing in 2017. The first two are preferred shares traded in the Toronto Stock Exchange in US dollars. The Brookfield bond is also in US dollars. All three securities are held in a US account with a Canadian Discount Broker in Ontario. The Discount broker reports the income of these securities annually on T3s and T5s.

If they are classified as foreign income, do we still have to report them on Form T1135, even if our foreign property was less than $100,000 in the preceding year?
Thank you for your advice.

Q: When can i buy a company back that i sold for a loss. I sold it on the 17 of dec and the settlement day was dec 22. thanks

Q: Good morning and Happy New Year to all at 5i.

My RRSP was recently transitioned to a RRIF. I understand that an "in-kind" transfer of a stock held within the RRIF can be made to a non-registered account (and of course taxes must be paid when doing this.) My broker (Scotia iTrade) informed me that I can opt for an in-kind transfer using the stock's lowest price, or highest price, or closing price for that particular day. What are the relative advantages and disadvantages for each option? Also, in answer to another member's question, you said that in general, it's better to sell the 'lower' stocks; would this advice also apply to an in-kind transfer? Thanks as always for your advice. Joining 5i was the best financial decision I ever made!

Q: On January 2nd you stated the cumulative contribution limit on a TFSA was $36,500. What am I missing, my calculation puts it at $26,500??
Ed

Q: Hi Peter: I made a mistake selling a stock within 30 days after purchasing for tax loss. Then people told me I could use the loss amount to increase the ACB if I buy the same stock again, is this true? Is there any time limit to buy it back? Thank you.

Merry X'mas & Happy New Year to you and your team.

Q: Appreciate advice on tax-loss selling. I have not yet realized any of my capital gains from this year and don't intend to. I do have some stocks that are down - eg. BDI, AVO.

I have a long-term horizon but in general, is there any advantage to realizing capital losses without offsetting gains versus just sitting tight and riding out the drop.

Thanks for the great service.

Q: If you sell a stock in a Tax free account that results in a capital loss does the loss provide you with additional room within the tax free account over and above your annual contributions?

Q: With a diversified fixed income portfolio, which would you prefer:
Arits REIT AX.DB.U 5.75% 30-JUN-2018 Price:104.75, YTM:4.3%
Parland Fuel Bond 5.5% 28-May-2001 Price: 102.50, YTM: 5.2%
Also, an RRSP has to be converted to a RRIF in the year someone turns 71, do you have to withdraw that year, or is it the year in which you turn 72 that you have to start withdrawing?