Q: RBC has in the past year started to record the ROC (return of capital) portion of my monthly investments in my registered accounts. Considering one is taxed on the value of the amount withdrawn from a registered account, I am looking to understand what is the bigger picture intent of RBC adjusting book values down for the ROC in registered accounts? Thanks for your insight!
You can view 3 more answers this month. Sign up for a free trial for unlimited access.
Investment Q&A
Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.
Q: Setting aside currency considerations, which ETF-- VWO.US or ZEM.CA-- is better to hold within an RRSP? (I am asking this question because I know that based upon the different ways that ETFs are structured, some have less losses based on foreign tax rules and considerations.)
Ted
Ted
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) ?
thanks
thanks
Q: Hello
On Jan 4th, I asked a question about the best place to hold VGG for tax efficiency. I was told that a TFSA or RRSP would be best. However, I read an article by Moez Mahrez in Canadian Money saver and looked at the tax efficiency table posted on the same website. If I am correct in my interpretation, both of these sites seem to recommend holding an ETF that trades in CAD but is US listed in a RRSP first and then a non-registered account because the dividend that incurs US withholding tax is recoverable in the non-registered account. In a TFSA, the dividend incurs withholding tax but it is not recoverable. Am I correct in my interpretation?
thanks for your help
On Jan 4th, I asked a question about the best place to hold VGG for tax efficiency. I was told that a TFSA or RRSP would be best. However, I read an article by Moez Mahrez in Canadian Money saver and looked at the tax efficiency table posted on the same website. If I am correct in my interpretation, both of these sites seem to recommend holding an ETF that trades in CAD but is US listed in a RRSP first and then a non-registered account because the dividend that incurs US withholding tax is recoverable in the non-registered account. In a TFSA, the dividend incurs withholding tax but it is not recoverable. Am I correct in my interpretation?
thanks for your help
-
BMO MSCI Emerging Markets Index ETF (ZEM)
-
iShares Core MSCI Emerging Markets IMI Index ETF (XEC)
-
Vanguard FTSE Emerging Markets All Cap Index ETF (VEE)
Q: can you tell me if holding VEE, ZEM, or XEC has any advantage over the other in terms of tax efficiency? Also, can you rank order in terms of which account emerging market etf should be held for tax efficiency (please rank best to worse).
thanks
thanks
-
Starbucks Corporation (SBUX)
-
JPMorgan Chase & Co. (JPM)
-
Williams Companies Inc. (The) (WMB)
-
Kimbell Royalty Partners Representing Limited Partner Interests (KRP)
Q: Good morning 5i team. I am interested in your opinion of KRP being held in a US rrsp. In reading your last response the withholding tax seemed to override your recommendation. Second question is under the present market conditions with 1 year to a lif conversion I have been bolstering interest yielding investment with a potential for capital gain. Could you recommend 3 Cdn and 3 US stocks or etf's with high dividends that have good earnings outlooks, valuation and perhaps some growth.
Q: Hi Peter, Can i transfer stocks from RESP to kids TFSA account without selling and rebuying?
Q: If an ETF distributes a high proportion of ROC every year ,and if I never sell this ETF,could the adjusted book value become "negative" at some point ? If not,this would mean that the maximum capital gain would always be limited to the NAV if sold ,even if the distributions ,after many years, would exceed the adjusted book value ! there is also a tax advantage as long as it is not sold..
Q: BIPC can be purchased in either Cdn $$ or in US $$. If it is purchased in US $$ are its dividends still eligible for the dividend tax credit?
-
Constellation Software Inc. (CSU)
-
Shopify Inc. Class A Subordinate Voting Shares (SHOP)
-
Lumine Group Inc. (LMN)
Q: Hi, Large Cap Tech stocks in US started the new year with a sharp pull back.
In Canada, Shopify was the one which followed the trend with 6-7% drop. Constellation Software was largely unchanged and Lumine is consolidating from recent sharp gains. We hold all above stocks in our Non-Regd as well as TFSA accounts. There is about $80k TFSA Contribution room available, due to withdrawls made last year. We are considering In-Kind contributions to add to our TFSA holdings when MV of these stocks are lower, in order to limit crystallization of capital gains, as all of these names have large gains embedded, in our taxable account. Is it a reasonable approach ?
If technology sector witnesses some more decline (after very strong returns during 2023), what are the next Technical support levels for these three stocks ?
Thank You
In Canada, Shopify was the one which followed the trend with 6-7% drop. Constellation Software was largely unchanged and Lumine is consolidating from recent sharp gains. We hold all above stocks in our Non-Regd as well as TFSA accounts. There is about $80k TFSA Contribution room available, due to withdrawls made last year. We are considering In-Kind contributions to add to our TFSA holdings when MV of these stocks are lower, in order to limit crystallization of capital gains, as all of these names have large gains embedded, in our taxable account. Is it a reasonable approach ?
If technology sector witnesses some more decline (after very strong returns during 2023), what are the next Technical support levels for these three stocks ?
Thank You
Q: Today is the last day for tax loss selling they say. Is this only for stocks or also for options' positions? Should one sell one's positions even if the option expiry date is in Jan to take a loss and re-enter in Jan 24? New to the options writing. Sorry for posting this question during this holiday season. Answer it if you deem this as urgent.
Happy Healthy Peaceful and Prosperous New Year!
Happy Healthy Peaceful and Prosperous New Year!
-
Purpose High Interest Savings Fund (PSA)
-
Purpose US Cash Fund (PSU.U)
-
CI High Interest Savings ETF (CSAV)
-
Global X High Interest Savings ETF (CASH)
-
US High Interest Savings Account Fund (HISU.U)
Q: Happy Holidays,
I have a question about tax efficiency on HISA ETF investments in non-registered accounts. Do the dividends received from these ETFs qualify for any dividends tax credits? Or are they being treated as interest income, such as GIC, which will be subject to the usual marginal tax rates?
Thank you,
I have a question about tax efficiency on HISA ETF investments in non-registered accounts. Do the dividends received from these ETFs qualify for any dividends tax credits? Or are they being treated as interest income, such as GIC, which will be subject to the usual marginal tax rates?
Thank you,
Q: Down 17% on BNS. Would you sell for a tax loss or stay the course? Thanks for your support in 2023.
Q: Hi 5i
You recently answered this question from Steve:
Recently a couple of younger friends (mid-60's)have just converted their RRSPs to RRIFs. Except for the possibility of needing the cash flow, I can't understand why they would want to convert to a RRIF.
Am I missing something? Are there advantages to converting early?
~~~~~~~~~~~~~~~~~~~~~~
Another reason his friends may be doing this is long term tax planning. Quick example, a couple in their mid 60s each has 500k in RSPs. If they were to both die suddenly that $1 million all gets reported as income on one return and most of it is taxed at over 40% (in BC the amount over $241k is 53.50%). To avoid this, the couple would need to live long lives and gradually draw the money out. But because none of us know when our time is up, they could take some out now in the 20% or 28.2% tax brackets (BC rates). The winners will be the kids and grandkids, the loser will be CRA. So by taking money out before 71, they are increasing the years when they can take money out at less than 30%, and reducing the potential giant tax bill at the end. And if they have not fully funded their TFSAs, they can use this money to top them up. Then going forward their interest, divs and cap gains aren't taxed. In the RSP or RIF, they will be taxed on all 3 when they take it out.
Greg
You recently answered this question from Steve:
Recently a couple of younger friends (mid-60's)have just converted their RRSPs to RRIFs. Except for the possibility of needing the cash flow, I can't understand why they would want to convert to a RRIF.
Am I missing something? Are there advantages to converting early?
~~~~~~~~~~~~~~~~~~~~~~
Another reason his friends may be doing this is long term tax planning. Quick example, a couple in their mid 60s each has 500k in RSPs. If they were to both die suddenly that $1 million all gets reported as income on one return and most of it is taxed at over 40% (in BC the amount over $241k is 53.50%). To avoid this, the couple would need to live long lives and gradually draw the money out. But because none of us know when our time is up, they could take some out now in the 20% or 28.2% tax brackets (BC rates). The winners will be the kids and grandkids, the loser will be CRA. So by taking money out before 71, they are increasing the years when they can take money out at less than 30%, and reducing the potential giant tax bill at the end. And if they have not fully funded their TFSAs, they can use this money to top them up. Then going forward their interest, divs and cap gains aren't taxed. In the RSP or RIF, they will be taxed on all 3 when they take it out.
Greg
Q: Please make it public at your discretion.
In response to Maureen's question about a tax calculator, I have used the one at Ernst & Young for years. It is very robust and includes interest income and all of the provinces and federal tax.
https://www.ey.com/en_ca/tax/tax-calculators
Paul F.
In response to Maureen's question about a tax calculator, I have used the one at Ernst & Young for years. It is very robust and includes interest income and all of the provinces and federal tax.
https://www.ey.com/en_ca/tax/tax-calculators
Paul F.
Q: Are you aware of a chart that compares tax levels on both capital gains and Canadian dividends at different income levels? Thank you.
Q: They recently reduced the amount of shares I had. But the broker TD is showing me only the new prices which have moved quite a bit lately.They are not showing original investment amount. It shows I am making money,but in reality to original investment i am losing money. Could i Claim the loss in the difference. Should I contact TD
Q: Retired, dividend income investor. I'm 69 and doing some thinking regarding conversion of my RRSP to a RRIF.
Years ago I went into RBC to discuss this issue and it was recommended that I hold off converting to a RRIF. Instead I should consider using a RRIF calculator and withdraw that amount from my RRSP, at my discretion. That way I was not forced to all of the rules of the RRIF (like mandatory minimum withdrawals). Plus, by having early withdraws from my RRSP, it would help to smooth out and potentially reduce the income taxes compared to if I waited until mandatory RRIF time. That's what I have been doing for probably 10 years.
Recently a couple of younger friends (mid-60's)have just converted their RRSPs to RRIFs. Except for the possibility of needing the cash flow, I can't understand why they would want to convert to a RRIF.
Am I missing something? Are there advantages to converting early?
Thanks...Steve
Years ago I went into RBC to discuss this issue and it was recommended that I hold off converting to a RRIF. Instead I should consider using a RRIF calculator and withdraw that amount from my RRSP, at my discretion. That way I was not forced to all of the rules of the RRIF (like mandatory minimum withdrawals). Plus, by having early withdraws from my RRSP, it would help to smooth out and potentially reduce the income taxes compared to if I waited until mandatory RRIF time. That's what I have been doing for probably 10 years.
Recently a couple of younger friends (mid-60's)have just converted their RRSPs to RRIFs. Except for the possibility of needing the cash flow, I can't understand why they would want to convert to a RRIF.
Am I missing something? Are there advantages to converting early?
Thanks...Steve
Q: Hi There,
I never sold my MRS shares. In my brokerage account it shows that I still own 9000 shares. I noticed that MRS no longer trades. How do I sell my shares so that I can claim the loss on my 2023 taxes? If I cannot sell them, do I still get to claim the loss on my taxes since they no longer trade?
Any guidance you can provide will be greatly appreciated. Thank you.
PS - I use Questrade if that helps. Don't know if I have to make a 'request' to take action on the shares, etc.
Thank you!
Gone
I never sold my MRS shares. In my brokerage account it shows that I still own 9000 shares. I noticed that MRS no longer trades. How do I sell my shares so that I can claim the loss on my 2023 taxes? If I cannot sell them, do I still get to claim the loss on my taxes since they no longer trade?
Any guidance you can provide will be greatly appreciated. Thank you.
PS - I use Questrade if that helps. Don't know if I have to make a 'request' to take action on the shares, etc.
Thank you!
Gone
Q: Season’s Greetings 5ir staff
I sold a stock with a tax loss on Nov 21. The settlement date was Nov 23. What is the earliest day that I can place an order to repurchased the stock (with the settlement date typically two days later) without triggering a superficial tax loss.
Thanks! I am grateful for all your guidance, insight and analysis.
I sold a stock with a tax loss on Nov 21. The settlement date was Nov 23. What is the earliest day that I can place an order to repurchased the stock (with the settlement date typically two days later) without triggering a superficial tax loss.
Thanks! I am grateful for all your guidance, insight and analysis.