Investment Q&A

Q: Hello 5i, I own Crew in a cash acct and will wait for the conversion to shares of Tourmaline. My question is will this transaction be considered as a taxable disposition of my Crew shares?

Q: I'm leaning towards emax in a cash account to diversify with the US holdings even though encc has a higher yield.

What are the tax implications of emax vs. encc.

emax writes in the money options on 30% of the holdings
I cannot find this data for encc

Thank you

Q: I currently hold NVDA in non-registered account and two registered accounts. In view of the poor performance and perhaps a low future growth in the automotive industry, I am thinking of selling my position in the non-registered account, harvest a capital loss and initiate a position in NVDA. I am trying to take advantage of the pullback in NVDA and increase the growth profile. Understanding your limitation in providing advice on this move, your opinion of the pros and cons of this switch would be appreciated.

Q: For reporting exchange rates re capital gains on the sale of US securities that are kept in USD rather than being converted to CAD after the sale, is there a particular site you can recommend - such as the Bank of Canada daily exchange rates? If so, would the noon-hour or closing rate be used and is it the trade or settlement date that should be used for reporting? Or, is the retail exchange rate charged by the brokerage more appropriate? I find it can be difficult to find historical exchange rates on the websites of many financial institutions. Thanks.

Q: Good morning team, I’m contributing to a non registered account for the first time as I’m maxed out in my tfsa and rrsp. My goal is to invest in dividend paying etfs and select dividend stocks while trying to take advantage of the dividend tax credit. I’m looking for yields north of 4%. XDIV looks good to me so far. How would HDIV and HYLD be taxed? Thoughts and suggestions? Thanks

Q: I’m trying to get to the bottom of whether or not CDRs are considered U.S.-situs property for Canadian citizens/residents who don’t otherwise have any U.S. connection (other than through their stock market investments). If one checks the CDR website (https://cdr.cibc.com/#/contact), there is the following statement: “The application of U.S. federal estate tax to CDR holders is dependent on an individual’s particular circumstances and CIBC does not provide tax advice. As such, CDR holders should consult their own tax advisors regarding the U.S. federal estate tax consequences of investing in the CDRs.” I have never seen any “official” document on any website that provides a clear answer. Are you aware of anything “official” out there that is definitive in this regard? I am looking for a definitive source (reference) that can be cited in this regard. (And please make the assumption when addressing this question that the Canadian account holder in question would have sufficient overall assets that they would be subject to U.S. estate taxes, if indeed CDRs for U.S. corporations are indeed considered to be U.S.-situs assets.) (I realize you are not tax experts/advisors, but this does seem to be a rather basic issue that must somewhere have a clear cut "official" answer.)
Ted

Q: Although I realize you are not tax experts, I have a general question about holding ETF’s in an an open account. My understanding is that Canadian-listed ETF’s are exempt from the T1135 filing. So I believe HXDM, even though an International ETF, could be held in a non-registered account without any filing requirement. Is my assumption correct?

On the other hand, any ETF could be held within an RRSP without filing (eg. VWO).

Q: does it make sense for a buy and hold investor to sell and buy back high growth stocks to spread out the income tax or is that unwise?

Q: There is the usual 15% withholding tax on the interest received from this TBIL. Is this tax recoverable at income tax time? If not, can you suggest a fund or ETF where there is no withholding tax? Thank you. cheers

Q: Hi, We have some large capital gains crystallized this year, as a result of trimming of some overweight holdings and rebalancing of our Taxable account portfolio. The two securities, we have some losses in, are DRX and TVK. We are toying with a plan to sell those positions in full ( 2% and 1.75%, respectively) in order to book some losses to help us offset the large gains.

We also intend to buy back full or partial positions, after 30 days, as these are some of highly recommended companies by 5i.

Considering that both stocks are trading close to their recent lows, do you see any merit in this strategy ? Are there any catalysts, in the near term for these companies, which could be favourable to stocks but pose a risk to our buyback plan ?

Thank You

Q: I know this is outside 5i's wheelhouse, but I am going to cheekily ask it anyway. I am contemplating a 50% drawdown of my investments (to purchase a cottage) and want to determine the optimal way to do so. 50% of my investments are in a cash account, and roughly 50% split equally between TFSAs and RRSPs (all of which are maxed out). Almost all my high growth stocks are in my TFSA (NVDA, VRT, GOOG, MSFT, AMZN), with mostly slower growers and dividend stocks in the other accounts. Considering both tax consequences and the need to continue having a diversified portfolio, where would YOU take the money from?

Q: In my earlier question I also should have asked about leverage. Thanks

Q: I hold CDRs for us companies within RRSP and TSFA and ACB is over $100000 do I have to fill in T1135 every year?

Q: My teenage daughters have some extra cash from grandparents and odd jobs. I currently maximized their RESPs but would like to see them invest the money in some stocks to have them learn first hand about investing. I realize you aren’t tax experts but wondering if you could point me to how best to do this. I understand I have to be account holder so for them to get the stocks I would have to sell them when they’re 18 and I pay capital gains or is there a way to transfer it to them and they pay capital gains tax? Any help on this would be appreciated.

Q: I have 3 questions in relation to my plans for realizing a capital loss re: a Starbucks (SBUX) holding within a corporate account. So far in 2024, I have realized net capital gains of ~$260,000 (100%) within this corporate account (I did this so as to capture the 50% inclusion rate effective before June 25, 2024). However, I now wish to partially offset this realized gain by realizing a capital loss for this position in Starbucks, currently at ~$90,000 (100%) unrealized capital loss.
(A) Would the 66.67% inclusion rate apply for this SBUX loss, if realized, even if all the previously realized capital gains during 2024 are applied at the 50% inclusion rate? (I realize you are not accountants, but I do know that you are generally aware of basic accounting principles related to commonly encountered investment scenarios.) It is my understanding that the 66.67% inclusion rate would apply, for this loss after June 25, but I am hoping you can corroborate this.
(B) My plan is to reacquire the Starbucks shares, after 30 days; however, I am not sure whether to just hold the SBUX sale proceeds in cash, for the minimum >30 day period, or whether to switch temporarily into a similar type of investment—what would you consider to be a reasonable “proxy” for SBUX? (note—I already own a similarly-sized position in QSR as my current SBUX position). Or given the possible slowing of consumer spending, and frequent summer stock trading doldrums, would you rather just hold cash for the >30-day waiting period?
(C) Finally, I am always nervous when the >30-day waiting period overlaps with a company earnings announcement (potential for greater price volatility). It appears that the next likely earnings announcement date for SBUX is expected to be around August 6, 2024. In other words, I could either realize the SBUX loss in the next few days (e.g., settlement on July 3 or July 5), or else wait until after the early August earnings announcement. I am curious how you would think about and approach this issue?

Ted

Q: Do CDRs of US companies need be reported on T1135 if ACB is over $100K?

Thanks in advance.

Q: Morning 5i Team,

I have s simple question regrading tax treatment of interest expenses.

Let's say I borrow money to purchase dividend paying stocks. How should I handle the interest so paid on such a loan? Do I simply write it off in the year the expenses are incurred or do I add the cumulated interest charges to the adjusted cost base of the stock when I sell.

Your help is much appreciated.
H

Q: What, if any, are the tax and dividend implications of having CDRs in a registered and a non- registered account?

Q: Adding on to Julie’s currency questions and your response. I’ve come to understand when contributing US funds into a US TFSA the CRA requires it be recorded in CAD, which I understand means you need to take US funds and buy a US money market, place it in your CAD TSFA and then transfer to your US TSFA and finally sell. I was told not doing so will incur additional currency exchange costs.

Do I have that correct?

Thanks all.

Q: Good day team, I’m looking to purchase both XLB and HDIV. Which accounts would be best suited for these ETFs?