Investment Q&A

Q: Hi There,
I just wanted to confirm that if you transfer a security from a cash account to a RRSP account, any accrued capital gain on the transferred securities on an in-kind contribution to an RRSP is immediately taxable to you, while any loss on such a transfer would be denied from being claimed as a capital loss.....is this correct!

If so, if you sold the security in the cash account and then transferred the cash to the RRSP, would you then be able to claim the capital loss?
Thank You,

Q: Good morning,

If the onus is on the taxpayer to adjust one's ACB on mutual funds every year when there is a return of capital ("ROC"), how likely do you think it is that the CRA has as good a handle on what your ACB is on a particular holding?

I am fine to do it, and have been doing it annually for years. But as I started the process yesterday for the 2022 tax year, I could not help but wonder if it really is worth it. It is such a manual process that I struggle with how the CRA could track something like this for every individual tax payer.

Q: Hi ,I hope you can help me with my question
If you own a GIC say. a. 5 year one and the owner passes
earlier ?Can it be cashed
or would you have to wait till the regular cashing date.to settle the estate.
thanks a lot
Margit

Q: If one trades a stock inside a registered account at a loss, does one still have to wait 30 days before buying back either inside or outside any account, registered or non-registered. Thanks

Q: Hello 5i,
It was mentioned that XHY should be kept in a registered account as it is foreign income. The dividend is shown to be paid in Canadian funds and the exchange is TSX.Where are the foreign income consequences related to holding XHY?
Thank you for your service
Stanley

Q: Hi,

Based on the questions pertaining to taxable dividends, and managing an income portfolio for my elderly parents, is there a substantial difference in tax treatment, if the above funds are held in a cash account? I was fortunate enough to get DIR.UN into a TFSA and am slowly moving AW into a TFSA as well. Do I take out the growthier names in the TFSA’s and move in the ETF’s or just let them go in a cash account?

Q: I have 100 shares of googl which presently is showing a loss of approx. $3400. Today I bought 200 shares of goog and would like to sell the googl for the tax loss, can I do this tomorrow and qualify for the tax loss? Because the buy today is goog and the sell of googl does this have any implication re the tax loss?

Q: Hi
I know that there has been lots of discussion on 5i about the cost base for Topicus when it was spun out from CSU. However, I've reviewed the questions and forums and I'm still confused. TOI has been sold in a non-registered account and now I need to determine the cost base for tax purposes. The brokerage shows $0. Is there a consensus on what the TOI cost base at spin out should be? Thanks for providing some clarity!

Q: In a recent response to me you linked to another answer in which you wrote “There would be no withholding tax in an RRSP account”.
I hold MDT in an RRSP and there is in fact a 25% tax withheld. Company is Dublin- based.

Q: Is the cost of currency exchange something that can be written off on taxes? And if it is, is it captured in the tax statements most brokers provide? And where?

Q: Can you explain the 30 day rule on buying back shares that have been previously sold . Is it 30 calendar days ...eg sold on Dec 28 2022 can i safely buy them back on Jan 28 or have to wait until Jan 29? Thanks

Q: Hello 5i Team

I currently hold shares in Cogeco Communications Inc. (CCA) which currently have a capital loss.

Can I sell Cogeco Communications Inc. (CCA) and book the tax loss and concurrently purchase Cogeco Inc. (CGO) as a hedge for the next 30 days and then re-buy CCA.

Would this keep me on-side with Canada Revenue Agency and the superficial capital loss rules?

Thank you

Q: Good afternoon,

I would like to ask a question regarding return of capital ("ROC") with some mutual funds. I am having a tough time getting my head around the actual logistics of how this works. Consider the following basis example:

I own 1000 units in Fund A. My ACB is $10 for an initial investment of $10,000. It is trading at $10. My yield is 5%, paid monthly. Let's assume that of this 5% yield, 4% is dividend, and 1% ROC.

Assuming AUM for the fund remain constant, and assuming that I continue to hold 1000 units, where does the cash come from to pay this 1% ROC? I am assuming that for it to be classified as ROC for tax purposes that it is neither income nor capital gains. And beyond my ACB being reduced, is there anything else regarding my initial investment that I need to be concerned about.

Q: Given that I sold this Purpose bitcoin fund for tax loss in Dec, can I replace it with an alternative company bitcoin fund (CIX) and not jeopardize the tax benefits? It has not yet been 30 days since the sale. Thanks,

Q: Enterprise Products is a Limited Partnership versus Sabine Royalty Trust, I have a general understanding of LP's but would like to know how a royalty trust would differ from an income and risk point of view. These are both listed on the NYSE. I do have holdings in EPD, not in SBR... yet?

Thanks, Doug

Q: These two preferred are going to be reset next month. Is a conversion from BCE.PC to BCE.PD, or the reverse, tax-free if we choose to do so?

I was very successful in the last 2 years with the BCE.PD floating shares, but would it be wise to let them go and convert to the fixed-reset at this moment of plateauing interest rates? I guess it could depend on the new rates which will be determined on Feb06.

Thanks to the team.

Q: For a covered call ETF,the ROC will reduce progressively, year after year ,the initial book value,so what will happen then if you don't sell the ETF after many years : if the book value reaches zero,does this means that the book value could then become negative? If not,it will be interesting to keep the ETF for very long term..

Q: Good evening

What are your thoughts on these two ETF's ? I see you have answered a few questions on these already. I am thinking of buying ZSP.U for a long term hold. Do you prefer one over the other or does it really matter?

My main question is with US holding tax. Back in 2017 if I am understanding it right you answered that in an RRSP ZSP.U would still be subject to the taxes. Is that still the case? I am a bit confused as all my other US holdings in my LIRA and RRSP have no taxes held back on dividends. Before I buy I want to be sure my dividend on ZSP.U will not be taxed inside my LIRA.

Thanks Jimmy

Q: hello 5i:
can you tell me how much Return of Capital has been for ZWU dividends over the last 5 years?
thanks
Paul L

Q: Schedule K1 Tax Form. I was looking at general commodity type funds and see that DBC and PDBC seem somewhat similar if looking at their commodity portfolios. Both deal with 14 traded commodities. Was using ETF.com as the information source.

DBC seems to have more trading volume and also a higher mgmt expense (0.87%).
PDBC has mgmt expense of 0.62% and assets under mgmt seem to be approx 6Bil. vs 2.53Bil with DBC

One difference noticed is that the structure of PDBC doesn't result in the creation of a Schedule K1 Tax Form while DBC does.

Please explain to me like I'm a 12 year old and that I have a "BIG RED L" on my ETF/ETN trading knowledge and trades vehicle.... what significance is the K1 thing and what sort of pitfalls do I need to be aware of if trades are being done in non-registered accounts? Does the K1 have the potential to add complexity and hassle at tax time?

Thanks for all that you folks at 5i are doing. Much appreciated.