Investment Q&A

Q: Do I have this straight ? As a ( Canadian ) holder of these two non American ( Bermuda )stocks, effective January 1/23, when I sell them, I will be subject to a 10% withholding tax and will be required to file a US tax return ?

WOW !

Q: What are your recommendation's for my RIFF off 125,00.00 age 83 income or balanced portfolio

Q: In Investment (non-registered) accounts these 5 stocks are all 'under-water'. I am considering selling for 'tax loss' purposes and would appreciate your thoughts. Is this a useful approach? Are there any that merit re-purchase following 30 days 'waiting period'?

Q: Hello Peter, Apologize as i know you have addressed this but i am still confused. I would appreciate it if you can answer each of my concerns to clarify.
1. I hold both bep.un and bip.un in RRSP and TFSA. Will there be withholding tax as of Jan 2023 in both cases and if so, is the 10 percent tax on dividends and capital gains only ? If this is the case, I am assuming the brokerage would use the ACB to calculate the gains.
2. Would it better to sell both of these and redirect monies into BN and BAM
3. If i decide i don't want to deal with the tax , can i simply exchange both for bipc and bepc and if so, am I not losing as the prices of bipc and bepc are much higher and dividends are lower yield wise
4. Lastly if there is withholding tax on tfsa and rrsp, how do we recover it..
5. Could the tax just be on tfsa and not rrsp as rrsp is normally exempt from any withholding of dividends etc
Sincere thanks and happy holiday season..

Q: 11:23 AM 12/13/2022
It seems that the Brookfields are nothing but trouble from a taxable perspective and the new withholding tax may make it worse. The brokers will naturally take the withholding tax and it will be a fight to try to claim it back.

My question however is about the exchangeability of BEP.UN and BIP.UN into BEPC and BIPC. Can these exchanges still be made?

If I get my broker to do the exchanges does this become a taxable capital gains event? If so it is prohibitive for us as we have huge capital gains in both BEP.UN and BIP.UN which would prohibit the exchange.

Any suggestions on what to do?

Thank you......... Paul W. K.

Q: Will these be subject to proposed tax if held in tfsa?

Q: I read your response to whether US withholding tax applies to the Brookfield partnerships. In your answer you also used the word “accounts.” What do you mean by this word?

Q: I hold the above stocks in my RRSP. I understand that as of January 1, 2023, the IRS will require a 10% withholding tax when Canadian residents sell a limited partnership. Does this only apply to US based partnerships? Would it apply to BIP.un or BEP.un? Does it apply to partnerships held in an RRSP? It appears this could apply even if you sold at a loss. Thanks for your advice.

Q: Just received a letter from my discount broker advising of changes to US withholding tax on distributions and dispositions starting January 1, 2023 that "might" apply to Canadians holding publicly traded partnerships in any account, including RSPs. As a long-term holder of both BIP and BEP, I have significant capital and gains on both. These are held in an RSP, so I have never been concerned about any tax implications. But now . . . ? The Brookfield site advises that they "do not expect" non-US investors to be subject to any withholding tax, and there is also a letter from their tax lawyers with the same claim with a bit more positive wording, but it ends with a disclaimer (hey - we could be wrong!)

I do not want to sell either BIP or BEP, but it would annoy me more if I ended up losing the withholding tax on distributions and (particularly) dispositions. Not sure how the IRS can withhold tax on a Canadian selling a non-US based company, but obviously there is a way, as the letter came from my Canadian big-bank brokerage which also has a significant presence in the US. Also assume that with the stocks being in an RSP, there would be no means of recovery through tax credits.

I would appreciate any comments you have on this matter. If the stocks should be sold, it would have to be done this year. Would this problem also apply to BIPC and BEPC, if I just did a switch?

Thank-you, Grant

Q: Hello, I know your are not tax expert, but I risk myself asking because I am sure other members will receive a similar letter from their online broker. This is about the new US regulation code 1446. The letter I received today says:

Changes to the U.S. Taxation of Publicly Traded Partnerships.

New US regulations taking effect on January 1, 2023, will result in new withholding taxes for sales of publicly traded partnerships by non-US account holders.

Once these rules take effect in 2023, when a non-US national sells an interest in a publicly traded partnership, 10% of the gross proceeds of the sale will be withheld. The withholding taxes will be remitted to the US Treasury, and the non-US national will be responsible for filing a US income tax return and claiming any potential refund of the amount withheld.

Not all publicly traded partnerships will be subject to withholding. However, at this point it is difficult to say which publicly traded partnerships will and will not fall within the scope of the new rules...

I did phone my online broker to know more. I was told that I have two companies in my account affected by this: BEP.UN-CA and BIP.UN-CA. Even if they are held in a RRSP, these will be subjected to the new tax if I sell after January 1, 2023. I argued that these are Canadian companies, but they replied that because they are limited partnership and trade on both the Canadian and US markets the new 1446 regulation will apply.

According to what you know of Brookfield, is that true that this new tax will apply on both BIP.UN-CA and BEP.UN-CA starting from January 1, 2023? Thank you,

Q: FYI - I just received a notice from TD of "Potential changes coming to publicly traded partrneships from January 1, 2003" stating that a 10% US withholding tax may be levied on dispositions of and distributions from all Publicly Traded US and CND Partneships held by non US persons in ANY account type including RRSPs, TFSA, RIFs, RESPs........it then goes on to say that BIP, BEP and BBU do not expect non-US investors to be subject to US withholding tax.

Q: I am retired and so I spend a lot of time on business TV and online financial literature. It seems negative for 2023. Also, some popular securities BEP.UN - it has not had an up day in ages and ATZ has been range bound for the past 2 months. Today, FM is down 5% with no explanations on the sites I have checked as to why it is down 5%. Hopefully 5i can shed some light on my question. Thank you,

Q: hi,
preface: this question is based on what I am seeing on globe investor data. I can't find a PE ratio on BEP-UN? I see negative EPS. I see a negative ROE?! and Debt/Equity around 5. yikes. can you please elucidate for those of us not fully informed on the financial issues with this stock? it is continually drifting lower, and is now back to levels 2.5 years ago. also, technically where do you think the downside risk level for the price is? cheers, chris

Q: Can you give any reason for this stock to be making 52 week lows? I realize that interest rates have risen but I would have thought that Brookfield could finance debt internally. Thank you for your attention.

Q: which do you prefer at current prices for stability and some capital growth within a rrsp.

Q: Hi,

In considering my transfer from a Cash account to a TFSA for 2023, what 6 stocks would you prefer to have in a TFSA that are held in the income portfolio?

Q: It would seem that everyone is recommending BEP and yet it is on a continuous downtrend and if I compare it to other renewable such as NEE its not looking to good. Your thoughts on this company and why we should invest in it. Thanks

Q: Hi 5i, other than a widely telegraphed interest rate rises from the Fed, what else is driving this company to new lows? All the talking heads don't like it for reasons like; it's still expensive; it makes investments below cost of capital. Any insight to this downtrend would be greatly appreciated. Thx.

Q: Can you supply a few suggestions of dividend stocks that may be good to purchase during tax loss selling? Canadian and US if possible.
A few growth stocks would be a good balance to this question as well! Thanks, James

Q: What would be your top five income and growth investments for an rrsp