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).
- 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).
5i Research Answer:
1) Yes, a Canadian ETF does not have to be reported. 2) Yes, this is possible and will impact ACB if ROC is paid. 3) Yes, as an ETF holding foreign securities it likely will not have eligble dividends. 4) This is possible and will vary by year, and depends on what the fund owns each year. 5) True