Investment Q&A

Q: I would like to purchase about 5 ETF’s
Is there any advantage/ disadvantage to waiting till Jan 2022 as opposed to buying in 2021?
I know some mutual funds do a year end distribution which add income whic needs to be accounted for in current year’s taxes - I would like to avoid this
Do ETF’s have year end distributions ?
Thanks as always for your assistance

Q: Would you endorse selling AT and buy it back in 30 days?

Thanks for your service?

Q: "We are not tax experts, but it is generally wise for dual citizens to avoid TFSAs" This was your response to an Oct 25 question. I have been contributing to a TFSA since they started in 2009 with limits soon to exceed $80,000. There is some paperwork required as the Americans consider TFSAs a 'foreign trust' rather than a self funded, self directed investment vehicle. The paperwork time is worth the investment advantage. Some general guidance from US tax accountants would be beneficial to your subscribers with dual citizenship and those filing US tax forms. I use RLB with offices in KW/Guelph (Jeff Hood is the US tax person)

Q: Hello 5i,
I’m helping a conservative investor with a tfsa. Vbal makes up half of the account.
In trying to boost monthly income I’ve come up with the above etfs.
Based on 2020 distributions,how would each of the above etfs be taxed if held in a tfsa?
Also, can you please verify the sector exposure of zup (similar to pff - usd) I thought the financial % was underweight.

Q: On Nov. 2 you answered Scott's question about U.S. estate taxes, saying that "Canadian stocks that are interlisted on other exchanges do not get captured in U.S. estate taxes". What about ADRs that trade on U.S. exchanges?

Q: I was disturbed by a recent question about US estate tax and the fact that a Canadian Citizen residing in Canada is still subject to US Estate taxes if they hold US properties or US stocks or ETF's upon their death. I hold many US stocks. I also hold Canadian stocks on the US side of my brokerage account (ie AQN, BAM.A, MX, OTC etc_ in order to collect the dividends in US dollars. Are these Canadian equities being held in US dollars considered to be US investments when calculating US Estate Tax? I also hold a considerable amount of US dollars in the these accounts, is US currency considered to be US property as well?

Q: Re Comments from Richard on Oct27 about proceeds of WPT buyout. From what I read the special dividend is meant for US/foreign holders not canadians. I expected capital gain only. Could you clarify? Thanks.

Q: Hi 5i,
I'm not sure this is an appropriate question to ask but, here goes.
I was considering purchasing AMT for my TFSA and NonReg accounts.
Can you help explain the taxation issues I need to be aware of for each account. (capital gains and losses, distributions, dividends etc.
I understand that the taxation issues for a US REIT may be different from a US stock.
Thanks

Q: Thanks for your answer but I was really looking for the best time to ‘sell’ not buy, as I have capital gains to shelter, and some ‘losers’ to offset them.

Q: Hello,

I have my RRSP, TFSA and non-registered accounts with Interactive Brokers Canada (IBKR). In reading a review about IBKR, I read some comments about “the possibility that holdings within a RRSP held with Interactive Brokers Canada may in fact be taxed by the US IRS in the event of death of the account holder.”

I researched this further and read that the US estate tax regime applies to US situs assets. US situs assets are property located in or having a connection to the US, including the following:
1. Real property located in the US;
2. Shares of US publicly traded companies (even if owned inside a Canadian RRSP);
3. Shares of US private companies;
4. Cash accounts with US brokerage firms;
5. Tangible personal property located in the US with some degree of permanence; and
6. Certain debts owing by a US debtor.
https://altrolaw.com/blog-cross-border-estate-planning/us-situs-asset/

The IRS website indicates “Estate tax treaties between the U.S. and other countries often provide more favorable tax treatment to nonresidents by limiting the type of asset considered situated in the U.S. and subject to U.S. estate taxation.”
https://www.irs.gov/individuals/international-taxpayers/some-nonresidents-with-us-assets-must-file-estate-tax-returns

I own US stocks and ETFs (ex. AAPL, SPY, QQQ) in my RRSP and TFSAs. I also hold US$ cash in my non-registered account. Considering that there are significant investment opportunities in the US, I am loathe to stay away from investing in the US markets.

My questions are as follows:
1. Is there an estate tax treaty with the US to prevent (double) taxation? I would assume paying the necessary taxes in Canada would absolve the estate from having to pay any further taxes in the US.
2. Would it matter if my RRSP and TFSA are held in a purely Canadian brokerage such as RBC instead of IBKR which has a presence in both US, Canada and other countries?
3. Is a TFSA considered a non-registered account in the eyes of the IRS, specifically from the point of estate taxes.
4. Any other items to consider?

I would really appreciate your views and comments as I am sure this will be of interest to a fair number of your subscribers. Please deduct as many credits as required.

Thank you

Q: Hello,

I am in the process of converting my RRSP into a RRIF.

I also have a USD-SDRSP, would you know how the conversion of a US based account works?

Thanks

Stephen

Q: Hi Peter and team,

In your answer today to Stephen, you suggest TIP for a non-registered account. Would you know what is the tax paid on the dividend? I think it's taxed as interest?
Thank you!

Q: When and who required W-BEN form ? Do you require W-BEN for registered accounts
like TFSA or RRIF and non registered account .
Please elaborate on my question and tell me what happen and when if I do not have
filled W-BEN form.

Q: Hi. I want to buy an ETF for US or International exposure and therefore need to understand the impact of the withholding tax. In doing so, I need to determine the type of ETF they are such as; Canadian equity, Canadian dividend and income, U.S. Equity, International Equity Fund or Can Bon fund. So, wow do I determine what type of fund XAW or QEF fall under such that I can understand the withholding tax implications. Looking at the website/fact sheets/etc is still difficult to determine the "holdings" which has a direct correlation to the with holding tax.

Q: If one has some massive winners (but no offsetting losers) in a non-registered account, do you think it makes any sense to sell such securities this year given the on and off talk about the federal government increasing the capital gains inclusion rate?

Q: I bought EGLX in Margin account on June 8 and my Registered account on June 23. Can I claim a loss if I sell in a margin account only or do I need to sell in both accounts to claim a loss?

Thanks for the great service

Q: Hi Peter, Ryan, and Team,

Portfolio Analytics indicates that we need to increase our Real Estate holdings, but the only place to do so would be in an unregistered account. I’m looking at GRT.UN and TCN. My thinking is that even though GRT.UN has a slightly better chart, the best option would be to go with TCN, and since it’s not a REIT, there would be some tax advantages in this situation. Is my thinking correct? I should add that our only holdings in this sector are FSV and IIP.UN, both recommendations of 5i, but held in our RRIFs. A big thank you for these past recommendations, and for your assistance with my latest query.

Q: I have been holding BIP.UN for several years. Does it make to sell it and buy BIPC to get tax advantage. BIPC is about 3.5% more expensive than BIP.UN, which has narrowed down significantly in the last couple of years. Why did the difference narrow down so much and can it narrow down even further? Thanks.

Q: Hello Peter,
Are there any issues with having BEP,UN in a TFSA? Is it similar to investing in any other dividend paying stocks in a TFSA ( in terms of receiving dividends ): there are no extra forms to fill out as it is a limited partnership.. Also, if the company is not profitable, what is the thesis of investing in it: great cash flow, part of BAM, and the right sector such as renewable energy. From a fundamental basis, is it better than investing in AQN or NPI?

Q: I am down on these stocks EGLX (-24%), AT (-28%), BRAG (-24%) and PINS (-23%).
These stocks are in a non-registered account.

I have two questions. First, are these stocks worth holding for a turnaround or just take the loss (and take advantage of the tax loss credit) and move on?

Second, if they are worth holding I might do a tax loss sell and buy after 30 days. I am not sure how to time that. Do it now or at the end of the year?

Thank you for your help and advice as always.

David