Investment Q&A

Q: A tax question. Say I am up 100% on TCN at $15 if I bought 50% more and sold the lot at $15. Would that 50% lower my tax rate?

Q: If I add to an existing equity position with 1000 shares at $50, my existing ACB is $40, then sell those 1000 shares in 31 days at $52, is my reported capital gain on those 1000 shares $2 or $12. (and let's exclude the obvious change in the ACB with this purchase).

Thank you.

Q: On Jan. 17 Fernando asked a hypothetical question about keeping down the taxes on capital gains. I don't understand the last sentence of your reply: "Gains can also be reduced by carrying charges (interest) if any of the stocks pay a dividend". Can you please explain this? What in this situation can be written off as a carrying charge?

Q: My question relates to tax loss selling.
I sold two stocks prior to year end for a capital loss. However, the dividend payout after the sale date were automatically reinvested into the same two stocks. I called the discount broker a couple of days after this and had them sell the shares.
Do the reinvestment shares nullify the ability to claim the tax loss for the 2023 tax year?

Thanks for your assistance in advance.

Q: Good afternoon 5i
Taxes. If i buy a US stock with US dollars and sell it several years later. What happens. I know that i have to report the sale in Canadian dollars. But, i imagine that i will have to calculate the exchange rates on those two dates, no? It seems odd, since it was both bought and sold in US dollars.
Thanks

Q: Hi. I understand recently about the partnership conditions for Canadian investors. Td wants me to get a usTIN number. If I don’t do that what happens? Do I get fined? Is my security confiscated? Do I end up in jail? What happens if I just sell the security now?

Q: I have some shares that have dropped to half a cent in value. As one might expect these shares are very thinly traded. I would like to harvest a capital loss on this stock for income tax purposes. Do you have a suggestion on how one might go about doing that?

Q: 9:51 AM 1/20/2024
Does the US newly instituted tax rule on limited partnerships doing any business in the US now apply to BEP.UN, BIP.UN. BEPC, BIPC?
I have owned these for many years and all have very large capital gains in cash accounts so I am reluctant to sell them due to the crippling 10% 'disposition' tax on top of the big capital gain were I to sell. It seems I am caught in a tax trap! I would appreciate any advice on which ones are vulnerable to the tax and what to do.
Regards............ Paul W. K.

Q: Hello 5i
Many thanks for your continuing excellent weekly observations and advice.

In my RRIF, TFSA and Unregistered accounts some of the larger holdings are US companies (GOOG, MSFT, etc). I am concerned that upon my passing some or all of these US stocks may be vulnerable to US Estate Tax.
I know that there are various tax treaties between the US and Canada that might impact some or all of these holdings, but I am unclear on the details.
Can you tell me if either or both the TFSA and RRIF are exempt?
Can you provide references that would cover these questions?
Can you recommend CANADIAN-based ETFs that hold Mag. 7 and/or other popular US stocks?
Thanks again.

Q: I'm curious as to why you recommend VFV as it is my understanding that it is a Canadian ETF invested in a US S&P 500 ETF which has double taxation in a RRSP and doesn't seemed to be taxed favorably in a TFSA or non registered account either. Wouldn't be better to buy ZSP which invests directly in the S&P stocks or HXS which has a higher fee but no dividend to trigger withholding tax?

Q: Hello 5i,
If I transfer winning stocks in kind to a TFSA but do not cash them in will I have to pay tax on the dividends to be received?
Thank you
Stanley

Q: Morning Peter and 5i team,

I believe that Capital Losses can carried forward for 3 years, and after that they no long can be used. If that is true, I have a Capital Loss that expires in 2024 and would like to utilize it before I loose it.
I was thinking to selling some winners to get the Capital Gains to go against the Capital Losses and then buying them back. Is there a 30 day limit for Capital Gains as there is for Capital Losses (Tax Selling), and is this this a good strategy?

Thanks

Joe

Q: Peter and His Wonder Team
Here is an unusual question that I think I know the answer but looking for validation. I bought the largest Russian utility company before Putin invaded the Ukraine. Shortly after, the stock...I guess all Russian stocks...was delisted from the NYSE. I conclude it is a total loss...am I right? However I was wondering if it might ever be reinstated...for example in 5 years from now. If so would I still have claim to my stocks? Please tell me if all this thinking is impossible and this is just a tax loss conclusion. Your opinion please! Thank you!

Q: Before the end of 2023 I sold a position in TOU in my non-registered account in order to take a tax loss. I also have a TOU position in a registered RIF account with a significant gain, which I did not sell. I assume that this does not prevent me in using the loss in my non-registered cash account. I believe that the two accounts have basically nothing to to with each other. I intend to buy back TOU in my non-registered account after 30 days.
Please confirm.
Thank you!
Albert

Q: Re your answer to Fernando, capital losses can be carried forward forever, not only 3 years as per your answer. Capital losses can only be carried Back 3 years and applied to capital gains.

Q: 5i, hypothetical question ... if I sell all of my cash account (15 stocks) , and my capital gain is 300K, is it 27% ~ of 300K I would have to pay ... and : Is there a way to reduce my contribution to the tax pool.
thank you

Q: I recently sold BNS to harvest a capital loss with intention of repurchasing it after 30 days. In the meantime, I purchased ZEB while the 30 period passes. Is ZEB considered a "similar" security and therefore, I am unable to claim this loss?

Q: I realize this question is outside of your area of expertise but I have been reading your Q&A for years and am always amazed at your (and your members) breadth of knowledge. My CND morther recently passed away. She owned no property and all her assets were in TFSA's (4 children listed as beneficiaries) and GIC's in a nonregistered account. All asssets are to be evenly split amongst the 4 chidlren. I am the executor and my only question is, I have a sister in France that is to receive her share 1) does she have to pay any tax on the registered and nonregistered monies she receives or is it the same as in Canada where it is not deemed as income and is not taxed 2) with all the safeguards in place for fraud and money laundering are there limits/issues transfering her $80,000 inheritance and what is the best way to send it?

Any comments welcome

Q: Hi,
On Jan 9th I asked the following question
Q: can you tell me 1) if there is any difference in XEF and ZDM in terms of tax efficiency and 2) which accounts are best to hold these ETFs in in terms of tax efficiency (please rank from best to worse) ?

You answered the first part but not the second part. 2) Could you please rank from best to worse in regard to tax efficiency, which account (e.g., RRSP, TFSA, nonregistered) is best to hold them.
Thanks

Q: Will ZLU have any tax implications if held in a LIRA account?