Investment Q&A

Q: Good morning - reading about the 10pc withholding on US publicly traded partnerships and the US tax filing requirement to get the wh back. I have positions in two REITs in the US and wonder if I shouldn't bail right now and avoid the filing requirement. Also, part of my holdings are in registered accounts and this does not look good to me. Please advise. Thanks as usual.

Also, Merry Christmas to all of you at 5i. Your service has been a big help to me over the years, thanks again

al

Q: Hello
If I sell PHYS and my husband sells GLDM would AEM and PSLV be considered to close to PHYS and GLDM by CRA for tax loss harvesting?

Q: Do I have this straight ? As a ( Canadian ) holder of these two non American ( Bermuda )stocks, effective January 1/23, when I sell them, I will be subject to a 10% withholding tax and will be required to file a US tax return ?

WOW !

Q: From Disnat website:

Changes to the U.S. Taxation of Publicly traded partnerships (PTP)
starting January 1st, 2023 (Internal Revenue Code section 1446).
New US regulations taking effect on January 1, 2023, will result in new withholding taxes for sales of publicly traded partnerships by non-US account holders.
Once these rules take effect in 2023, when a non-US national sells an interest in a publicly traded partnership, 10% of the gross proceeds of the sale will be withheld. The withholding taxes will be remitted to the US Treasury, and the non-US national will be responsible for filing a US income tax return and claiming any potential refund of the amount withheld. 

Will BAM be affected by this knew legislation?
Thank you.

Q: Can you dumb down the non-cash distribution capreit announced tonight?

For me specifically, I hold it within a TFSA - what can I expect? Don't hold enough shares to even accumulate what would amount to one share, thought I might have understood that completely wrong as I guess no one is actually gaining shares?

Thanks in advance

Q: In Investment (non-registered) accounts these 5 stocks are all 'under-water'. I am considering selling for 'tax loss' purposes and would appreciate your thoughts. Is this a useful approach? Are there any that merit re-purchase following 30 days 'waiting period'?

Q: Will the 10% US withholding tax on dispositions and distributions of PTPs, levied against non-US persons effective January 1, 2023 apply to the old BAM.A or the new BN (or both)? And how is BAMR impacted?

Brookfield website says "section 1446(f) will not apply) to BAM.A but gives no detail, unlike their website on BIP (which details that section 1446(f) does not apply due to being Bermuda based and that the 10% exception rule applies)

I have a significant holding in BAM.A and want to know if I should take action prior to Jan 1, 2023

Q: What is the last day to sell a stock and have it count in 2022?

Q: My biggest loosers are TCN,ECN,SHOPIFY,WELL,WFG, NOT MENTIONING LOWER LOSSES STOCKS, wHICH ONE SHOULD BE SOLD AND WHICH ONE TO BUY AFTER 30 DAYS.

Q: Hello Peter, Apologize as i know you have addressed this but i am still confused. I would appreciate it if you can answer each of my concerns to clarify.
1. I hold both bep.un and bip.un in RRSP and TFSA. Will there be withholding tax as of Jan 2023 in both cases and if so, is the 10 percent tax on dividends and capital gains only ? If this is the case, I am assuming the brokerage would use the ACB to calculate the gains.
2. Would it better to sell both of these and redirect monies into BN and BAM
3. If i decide i don't want to deal with the tax , can i simply exchange both for bipc and bepc and if so, am I not losing as the prices of bipc and bepc are much higher and dividends are lower yield wise
4. Lastly if there is withholding tax on tfsa and rrsp, how do we recover it..
5. Could the tax just be on tfsa and not rrsp as rrsp is normally exempt from any withholding of dividends etc
Sincere thanks and happy holiday season..

Q: I got a note from BMO Investorline to fill out form W-8BEN regarding US withholding taxes.

Do I have to fill out this form if I only by US stocks in an RRSP?

thanks,

Paul

Q: 11:23 AM 12/13/2022
It seems that the Brookfields are nothing but trouble from a taxable perspective and the new withholding tax may make it worse. The brokers will naturally take the withholding tax and it will be a fight to try to claim it back.

My question however is about the exchangeability of BEP.UN and BIP.UN into BEPC and BIPC. Can these exchanges still be made?

If I get my broker to do the exchanges does this become a taxable capital gains event? If so it is prohibitive for us as we have huge capital gains in both BEP.UN and BIP.UN which would prohibit the exchange.

Any suggestions on what to do?

Thank you......... Paul W. K.

Q: Will these be subject to proposed tax if held in tfsa?

Q: I hold the above stocks in my Unregistered,TFSA,and RRIF accounts. I understand that as of January 1, 2023, the IRS will require a 10% withholding tax when Canadian residents sell US stocks. Does this rule apply to sell any of the above mentioned my stocks ?

2) If I sell above Stocks before end of 2022, will I avoid paying new IRS 2023 10% withholding tax?

Q: I read your response to whether US withholding tax applies to the Brookfield partnerships. In your answer you also used the word “accounts.” What do you mean by this word?

Q: I have a non-registered account that mainly consists of Canadian dividend-paying blue chip stocks. I'm retired. I'm looking at including XRE for diversification. I am fairly flexible on whether or not to put it into this particular account or an RRSP. From a tax point of view, would you have any recommendation ?

Q: I hold the above stocks in my RRSP. I understand that as of January 1, 2023, the IRS will require a 10% withholding tax when Canadian residents sell a limited partnership. Does this only apply to US based partnerships? Would it apply to BIP.un or BEP.un? Does it apply to partnerships held in an RRSP? It appears this could apply even if you sold at a loss. Thanks for your advice.

Q: Just received a letter from my discount broker advising of changes to US withholding tax on distributions and dispositions starting January 1, 2023 that "might" apply to Canadians holding publicly traded partnerships in any account, including RSPs. As a long-term holder of both BIP and BEP, I have significant capital and gains on both. These are held in an RSP, so I have never been concerned about any tax implications. But now . . . ? The Brookfield site advises that they "do not expect" non-US investors to be subject to any withholding tax, and there is also a letter from their tax lawyers with the same claim with a bit more positive wording, but it ends with a disclaimer (hey - we could be wrong!)

I do not want to sell either BIP or BEP, but it would annoy me more if I ended up losing the withholding tax on distributions and (particularly) dispositions. Not sure how the IRS can withhold tax on a Canadian selling a non-US based company, but obviously there is a way, as the letter came from my Canadian big-bank brokerage which also has a significant presence in the US. Also assume that with the stocks being in an RSP, there would be no means of recovery through tax credits.

I would appreciate any comments you have on this matter. If the stocks should be sold, it would have to be done this year. Would this problem also apply to BIPC and BEPC, if I just did a switch?

Thank-you, Grant

Q: Hello Peter,
This question is relating to your holdings in your Income Model Portfolio. Are all the income declared from these investments qualify for dividends tax credits? Or are they treated as normal income like interest income from GICs and would be subject to our normal tax rate?

If it is taxed at our marginal rate, would you recommend holding these investments in a RRSP account?
Many thanks,
Roger

Q: Hello, I know your are not tax expert, but I risk myself asking because I am sure other members will receive a similar letter from their online broker. This is about the new US regulation code 1446. The letter I received today says:

Changes to the U.S. Taxation of Publicly Traded Partnerships.

New US regulations taking effect on January 1, 2023, will result in new withholding taxes for sales of publicly traded partnerships by non-US account holders.

Once these rules take effect in 2023, when a non-US national sells an interest in a publicly traded partnership, 10% of the gross proceeds of the sale will be withheld. The withholding taxes will be remitted to the US Treasury, and the non-US national will be responsible for filing a US income tax return and claiming any potential refund of the amount withheld.

Not all publicly traded partnerships will be subject to withholding. However, at this point it is difficult to say which publicly traded partnerships will and will not fall within the scope of the new rules...

I did phone my online broker to know more. I was told that I have two companies in my account affected by this: BEP.UN-CA and BIP.UN-CA. Even if they are held in a RRSP, these will be subjected to the new tax if I sell after January 1, 2023. I argued that these are Canadian companies, but they replied that because they are limited partnership and trade on both the Canadian and US markets the new 1446 regulation will apply.

According to what you know of Brookfield, is that true that this new tax will apply on both BIP.UN-CA and BEP.UN-CA starting from January 1, 2023? Thank you,