Investment Q&A

Q: When deciding what to hold in a non-registered account, is it more important to maintain adequate exposure to the US with something like VUS, or to keep the dividend tax credit with a CDN option like CDZ or XEI?

Q: If investors have their dividends automatically reinvested, will they have to pay tax on the dividends in the current year?

Q: Good morning,

I'm looking at buying an ETF that tracks the S&P 500 for my TFSA account and am considering VFV.CA.

Withholding tax is a concern and given that VFV.CA holds US stocks, would there be a withholding tax on any of the dividends distributed and if so would you kindly recommend a few other similar ETFs that track the S&P 500 where the withholding tax is not a concern. Thank you.

Q: Last week I bought some shares in BEPC, stock was up next day so I sold for a profit.
In my TD account they took back 10% of the sale, not the profit but the sale. When I contacted TD they said it was a withholding tax and that I will receive a T5013 for my 2023 taxes. So according to this rationale I sold at a profit but now have a loss. TD told me to contact Brookfield to clarify and I am now anticipating a "he said, she said" argument between these 2 groups. Is this something you have encountered before and if so can you advise on how to cut to the chase here.

Q: I have a sizable capital loss for 2023 right now. I'm starting to think of selling some of my winners in my non-reg accounts to wipe that cap loss out this year. Three of the companies where I have capital gains are Hubspot, Mastercard, and The Trade Desk. What strategy would you recommend for me in selling some or all of these 3 positions to erase the capital loss. MA has been a longterm winner for me, but I worry about Fintech competitors eating into their business. I'd appreciate your insights on whether Hubspot has a rosy future or whether its best times are behind it. The Trade Desk is my most confident position, but, of course, I'd appreciate your opinion. Thanks!

Q: I have a significant capital loss on TIXT. I know you're not tax experts, but do you think TIXT is sufficiently independent from T such that if I take my tax loss on TIXT and put the proceeds in T until the 30 days is up before I reinvest in TIXT that CRA would allow the original tax loss? Thank you for all you do. John

Q: Would you be able to tell me the adjusted cost base of the shares when the dividend from Constellation Software was declared?

Thanks for your great service!!

Q: Thanks for your impression of bsm as an investment.

With reference to
First, note that with limited partnerships there are higher taxes for Canadians, including a new 10% tax of the proceeds of disposition.
Does that apply to a rrif or other registered accounts.

Q: I need assistance deciding which of these stocks I should put in a regular acct and which should be in a TFSA in other words, can you tell me if DIR.UN has a much higher taxable capital gains (and therefore should be ideally in a TFSA)?

Thanks

Q: Not a question but an answer from TD on info I was researching and I notice also A few people were asking about giving shares in lieu of cash to a charity so I thought I would forward the TD answer.

""You can make the donation from your margin account at no fee, all of have to do is obtain a donation form from the chosen charity which should have the receiving party's information pre filled and then you just have to fill in the margin account info for the delivering side.

Once filled out, you can scan in an email pdf format to me and I can submit to our back office who would process it in approx. 2-3 business days.""

Q: hi,
Is the "dividend" paid from ZRE actually treated as "interest" for tax purposes? and therefore, this would be best held in an RRSP? and more generally, in your opinion, which accounts are best for holding CDN vs US dividend stocks, CDN and US growth stocks (ie lots of capital gains ), and fixed income/interest?
cheers and thanks, chris

Q: Good morning,
Regarding the question asked by Jean on June 27 about charities and RRSPs I have been searching for general tax information at death on my RIF as well as specific information as it applies to beneficiaries and charities and have come up empty handed. I have tried the CRA by phone and website as well as my financial institution. I seem to be asking the wrong questions or want information that is kept in a black box.
Are you able to point me toward the source(s) of the information you use to answer Jean's question or must I look for a tax accountant.
Thank you for any assistance,
Brian

Q: If I buy ZDI in my TFSA, will the dividends be subject to a withholding tax?

Q: Hello 5I team: If someone retired with some room in RRSP which is in turn transferred to RRIF can they contribute with no employment income as long as they do not claim for a tax deduction?

Q: Thanks very much for your answe on my question about the previous covered call question. I understand in the situation described there would be a capital gain and thus the superficial loss rule doesn’t apply. I was interested, though, what would happen if the case did involve a capital loss. Would writing a put right away trigger a superficial loss? I wouldn’t think so, because you haven’t really bought the stock and won’t do so for thirty days or more. Would that be the right interpretation?
Thanks for all the help

Q: Good morning 5i
Just a clarification on your covered call strategy that you mentioned today. You said that if called away, say, at $45 you would immediately sell a put for $45 for about a month out. One of the reasons for this i imagine is that you think the stock has the wind in its sails. Right? Also, how would this strategy affect the superficial loss rule. I don’t imagine you would be seen as buying the stock within 30 days?
Thanks

Q: So here is an interesting one for you. Recent (early) retiree at age 55. Let's assume I have 2 bond funds - one domiciled offshore and set up as a Trust, and the other a traditional mutual fund domiciled in Canada. Assume both have a similar return and distribution profile, as well as holdings. The offshore one only pays nominal monthly distributions, meaning they essentially go towards increasing one's adjusted cost base ("ACB"). It is not an actual cash distribution. This is good in the sense that, in theory, this reduces your capital gains when one sells. The other one pays the same monthly distribution, but it is cash, and not just nominal. As a retiree looking for cash yield, am I being short-sighted in wanting to stick with the fund that pays the monthly cash distribution, or is there something besides what is noted here that I should be more focused on with the fund that pays the nominal distribution? At this stage, all other things being equal, I am inclined to sell the offshore one and just own the one fund that is domiciled in Canada and take the monthly cash income.

And sorry about the long question. I really did try to keep this short :)

Q: Re : Special dividend.
A 25 % withholding tax is indicated. Would this still apply if the shares are held in a TFSA?
Thank you,
Philip

Q: iTrade has notified me that I must apply for a TIN Number from USA if I trade PTB's or own them. Problem is I have no way of identifying if the stock is a PTP or not. The way I read it that would be all US stocks and the site they send me to (https://www.irs.gov/individuals/international-taxpayer-identificaion-numbers-tin) basically says you need to become a US citizen. I run 3 accounts in in USD, Cash, RIIF ant TFSA. Do I have to abandon US investing??

Q: I have received below email from Scotiaitrade since I have EPD shares in my RRSP account. My understanding was that in registered accounts I don't have to file a US tax return for PTPs disposition or distributions. I called Scotiaitrade and they did not provide any additional details for registered accounts and asked me to apply for US Tax Identification Number and consult my accountant for filing US tax return. Any details you may have would be appreciated.



In December 2022, Scotia iTRADE sent you an email advising of industry-wide changes that came into effect on January 1, 2023 and that impact your previous and/or current holdings of certain publicly traded partnership units (PTPs).

As part of these changes, a 10% withholding tax may be applied to certain distributions in addition to the usual 37% withholding tax on U.S. business income for non-U.S. persons. In the event of a disposition or transfer of the impacted PTPs a 10% withholding tax will also be applied to the gross proceeds in addition to the withholding tax on distributions.

Since you hold or have held impacted PTPs after January 1st, 2023, you must obtain a U.S. Tax Identification Number (TIN) and provide it to Scotia iTRADE by August 1, 2023. Scotia iTRADE is required to provide the Internal Revenue Service (IRS) with your name and address as part of our obligation to report beneficial ownership of impacted PTPs and thereby assist the IRS with reconciliation of US tax filings on an annual basis.

We ask that you apply for a U.S. TIN as soon as possible and call Customer Service at 1 -888-872-3388, Monday to Friday, 8 a.m. to 8 p.m. ET, to provide this information once you have received it.

If you have already obtained a U.S. TIN from the IRS though have not yet provided it to Scotia iTRADE, then please call Customer Service by August 1, 2023.

For help with requesting a U.S. TIN please refer to the following IRS website which outlines the application process: https://www.irs.gov/individuals/international-taxpayers/taxpayer-identification-numbers-tin and speak with your accountant and/or tax advisor should you have further questions.

Scotia iTRADE does not provide tax advice. If you have questions about the tax implications related to the PTPs held in your account, please consult with a tax advisor. If you have any questions about the transactions associated with the PTPs held in your account, please contact Customer Service at 1 -888-872-3388, Monday to Friday, 8 a.m. to 8 p.m. ET.