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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: It is my understanding that a 75% Capital Gain Inclusion Rate means simply that 75% of the capital gains are subject to tax. The percentage of tax owing is based on one's income. So if one's income was low enough the tax owed on the capital gain might be less than 75%. Brenda's question and your response seems to suggest otherwise. Please correct me if I am mistaken.
Thanks,
Jim
Read Answer Asked by James on July 12, 2021
Q: Say the capital gains inclusion rate increase from 50% to 75%. Does that mean it doesn't matter how long you've held the stock when you sell it gains are taxed at 75%? I'm not sure how the last rate changes were implemented but you may recall.
Read Answer Asked by Brenda on July 09, 2021
Q: I have USA stocks in joint margin account with Canadian Broker .
When calculating if cost amount of total value Foreign Property exceeds $100,000 CAD I will use highest total value of Book Cost of all US securities.
My question is: do you have to include in calculation of Total Amount any cash siting in my US account?

Andrew
Read Answer Asked by Andrzej on July 09, 2021
Q: I HAVE A QUESTION ABOUT WITH DRAWING FROM AN RRSP ACCOUNT. MY WIFE WANTS TO WITHDRAW $20,000 FROM HER RRSP ACCOUNT FROM AUGUST TO END OF YEAR. BY WITH DRAWING $5,000 AT A TIME SHE WILL PAY 10% OVER THE COUNTER FEES. BUT OUR BROKER TOLD US THAT HER SECOND WITHDRAW THEY WOULD TAKE 20% INSTEAD OF 10% I FIND IT LITTLE STRANGE BECAUSE IN THE PAST I WITH DREW $5,000 AT A TIME TO ONLY PAY 10%. OR HAS SOMETHING CHANGED IN THE LAST COUPLE OF YEARS.
Read Answer Asked by wilson on July 09, 2021
Q: My investment income has been bumping up against the OAS clawback level the last couple years (damn that dividend gross-up!), so I have moved some investments into reits and ETFs with high return of capital to keep reportable income down. Aside from the obvious - that ROC becomes capital gains when the stock is sold - are there some negatives about ROC or high ROC stocks of which I should be aware?
Thank-you
Read Answer Asked by grant on July 07, 2021
Q: I see your report on CDN companies paying US dividends and was wondering if currency gains are allowable in tax free accounts. If one were to accumulate US$ in the account and then flip to CDN$ at a profit would this put you offside with CRA?
Read Answer Asked by Robert on July 02, 2021
Q: Dear 5i,
If I hold BIPC.CA, BIPC.US, BEPC.CA, or BEPC.US in my non-registered Canadian account. do I have include them if I have to file Form T1135.
If yes what is the country code?
Read Answer Asked by Ian on June 30, 2021
Q: Hi 5i Team. The dialog and information related to form T1135 from earlier today was very helpful. To further the discussion let me ask the following; would the following ETF's (below) be considered a foreign assets under the CRA and need to be reported with Part B of the T1135? ETF's - ZWE, ZEM, ZPAY, ZWH, CARS.B, LIFE.B, ICLN, PID. Thx Steve
Read Answer Asked by Stephen on June 30, 2021
Q: Hi. I’m writing in response to Andrew’s earlier question regarding whether or not he needs to report BEP.UN on his T1135. I’d looked into this earlier this year for BEPC, BIPC, BIP.UN and BEP.UN. Brookfield’s web site addresses this specifically. Below is the link, and direct quote.

https://bep.brookfield.com/stock-and-distribution/tax-information

“Are units considered foreign property for the purposes of the Canada Revenue Agency T-1135 Form – Foreign Income Verification Statement?
No.”

Hope this assists.

Regards
Read Answer Asked by Cory on June 29, 2021
Q: Hi,

keeping in view the US Withholding tax on canadian investors.

If one has to hold US S&P 500, US mediam &small cap, US IT/technology ETF in canada.

Then which ETF would be be the best for a TFSA and cash account. ( I believe in a RRSP it does not matter ).

I currently hold SPY,VFV, IWO, VGT and QQQ in my TFSA and cash account. Do you think they are OK, or will you recommend some equivalent more efficient ETF's for exposure these sectors.

Keeping in view the difference between a TFSA and cash account, please suggest suitable ETF's for each, which would mirror SPY, VFV, VGT, IWO and QQQ.

Thanks
Harry
Read Answer Asked by HARRY on June 14, 2021
Q: This question is about Capital Gains Tax. Over a 5 year period I ended up buying a single stock at different prices in 3 separate accounts...Cash, Tax Free and Rif. So when I sell I am not sure what buying price to use. For example if I sold the stock in the cash account do I use the purchase price in that account or must I use an average of the 3 accounts. I guess the purchase price does not matter in the case of the Tax Free or Rif? Thanks for your clarification!
Read Answer Asked by Ernest on June 10, 2021
Q: Further to my earlier question about ROC in a registered account, the last paragraph of your reply seems to suggest that there is some value of this payment in a registered account but I don't see it. The ROC simply reduces the base cost but this has no meaning in a registered account as it is not used when an equity is sold. ROC payments can be substantial and it is a shame to lose them.
Read Answer Asked by richard on June 07, 2021
Q: Further to Bill's question today about ROC payments, it seems that if such a payment is made in a registered account its value is lost entirely as there is no capital gain to be had. Is there anyway to recover some or all of this value or are we better to avoid stocks in a registered account (at least for income purposes) that principally pay ROC?
Read Answer Asked by richard on June 04, 2021
Q: Peter
if I buy a US dividend fund in my RIF or my wife's RRSP, do they have a withholding tax on the dividends paid out? What about a Tax Free account?
Thank you
Ronald
Read Answer Asked by Ron on June 04, 2021
Q: Can you clarify about companies that pay part of their dividend through "Return of Capital". Are these considered a poor investment because they are just giving you your own money back? Also, what happens when you have had 100% of your original capital investment returned to you - do you still continue to receive "return on capital" even though you have received all of your original investment back or is the distribution then reduced as you no longer have any of your original capital left to return?
Thanks.
Read Answer Asked by Bill on June 03, 2021
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