Investment Q&A

Q: If i sell shares in a specific company, say RBC, at a loss and use the proceeds to buy a sector ETF that contains even a small portion of RBC within thirty days, are my losses still considered capital losses by the CRA

thanks

al

Q: If ones owns shares in company ‘x’ in their TFSA, and one wants to buy more shares but they have no more cash in their TFSA, what is left is buying more shares in a cash account. In the cash account, is the cost base determined only on the shares in the cash account, or are the shares inside the TFSA used in the cost base determination?
Thank you

Q: Peter,

I see the ACB on m TOI spinoff is extremely low. I would expect any deemed dividend on the T3 at year end to reflect this tiny amount as a dividend. Is this the way you see it?

Thank You

Paul

Q: I have held Alaris pre conversion for some time now in a taxable account . Since the conversion to a UN , now tax wise I am wondering whether it makes sense to even hold it in a taxable account. I am considering selling for those reasons.
Could I ask for your opinions in regards to AD.UN specific composition for Canadian income tax purposes?
Thanks

Q: In non-registered account we had huge gains in solid dividend payers (ENB, SLF,CNR,FTS) and last year against tax-loss selling was able to reduce weight in portfolio to approximately 4% each. Donated some shares to charities and also gifted some to son (still had to pay capital gains but didn't hurt as much because benefit is still in the family). New money has been going to growth securities and thanks to your advise in time we may have huge capital gains again. Are there other strategies for dealing with this happy problem?

Q: I am interested in investing in some US ETFs. I would put these into an RRSP account. Would there be tax consequences re the CRA or IRS in doing so? I imagine that there would be tax complications if they were held in a margin account.

Q: Ric asked a question about selling a stock, for a loss, that he had only just purchased 15 days earlier. Jamie Golembek had a very interesting article in the FP this past weekend, where he states that it is not necessarily straightforward, particularly if you only sell part of the holding, and not 100% of it, when that that holding was only just purchased within the prior 30 days before its ultimate sale. Certainly worth the read, because the CRA has a formula that they apparently follow.

Please see the link: https://financialpost.com/personal-finance/taxes/investors-should-beware-this-quirk-in-the-superficial-loss-rule-when-filing-their-taxes

Q: I was looking for the makeup of their last couple of years' distribution but their website had nothing. Can you help please? Specifically, I'm curious if it was all return of capital. Thanks a lot as usual.

Q: I bought a stock and sold it 15 days later at a lower price. Can I take a capital loss on this?

Q: Hi 5i
First time, Itrade has issued me a T5008 slip reporting around 30 ITEMS I bought/sold
indicating amounts for box-20 (book Value) and box-21 (Proceeds) .
I’ going to make up some numbers here for this example: Totals for
BOX20 = 500K , BOX21 = 650K , Gain = 150K .
I CASHED 90K, the other 60K was reinvested in the same
account. I should be taxed only in 90K?
I should only declare in my TAX return 90K ? correct?

Thanks

Q: hi there - recognising you are not tax experts i will ask anyways so if members can point me in the right direction. I received a 1099 form from CIBC but it doesn't specifiy which securities it covers. I am trying to confirm if these dividends are also covered on the T3 or is this separate?

Q: I don't often get timing right and mostly I get it right when I am not trying to. I sold AC (for a profit) mostly because I found other things that I could hold longer. AC may or may not sell off more but if I were to re-buy inside the 30 day window will that reduce my capital gains tax by averaging?

Q: I bought a spread call on Nexflix as one transaction and occur a loss. Do I report as 2 transactions on my taxes or one transaction? One option is profit and another one at loss. Am I allowed to claim a loss or it is not allowed for under 30 days.

Are there any specific Tax rules on trading spread options?

Thanks for the great service

Q: I am a very disgruntled customer after seeing my seeing my rrsp account (ETF STOCK NAME REMOVED) go from a gain to a loss due a notional payment/distribution (AKA phantom payment) causing my adjusted cost base to increase by $1.24. If my account wouldn't have shown a loss I wouldn't have picked up on this. After talking to your help line I am even more dissatisfied.
What is a notional payment?
It is a distribution declared by a fund or trust where no cash is paid to unit holders, but is considered taxable at the time it is declared. Notional payments are declared to avoid paying taxes on income earned within a fund or trust, but where the fund manager does not wish to deplete the resources of the fund or trust by paying distributions in cash. Notional distributions, sometimes called “phantom distributions” are taxable in the year declared, and will increase the adjusted cost base (ACB) of the security. You can usually identify a notional payment by looking for a TXPDDV payment, followed by a DRIP debit, for 0 shares.
If I understood what (ETF COMPANY NAME REMOVED) is doing with these so called distributions I would have never bought the etf as it makes such a small interest rate and then my adjusted cost base goes up by $1.24 by this phantom distribution causing a loss in(ETF STOCK NAME REMOVED). I am better off keeping cash in my account than holding (ETF STOCK NAME REMOVED).
This practice of passing on phantom distributions and causing losses to customers seems like a sneaky under handed way to pass on costs to keep your MER lower. I have lost trust in (COMPANY NAME REMOVED) ETF's.

Q: Good morning,
Just a quick clarification about a question I asked the other day about option buy backs. My question should have been whether you claim that loss this year, or do you roll it into the acb of the underlying stock,
thanks

Q: Hi group is it a good strategy to sell some of my big winners before the Federal Gov taxes capitol gain differently? - Do you agree this is an area (as well as other areas)) they will target to help pay for all the stimulus. If they took away all the capitol gains it would be very negative for a lot of folks. also please comment on how the govt taxes day traders and how they might get more aggressive in taxing day traders as business income Thanks for your insight

Q: I just got my T5013 for my 2 Brookfield companies and I can see what they've done to create the Corporations that pay eligible dividends but I don't understand why the taxable part far exceeds what I actually received. First, my eligible dividends have disappeared and I guess these go to the Corporation shares. However, on my BIP.UN I received about $2029 in distributions in 2020 but my T5013 shows distributions in excess of $8000 of which $4500 is Return of Capital. Any idea how my $2029 becomes $8000? PPY is much closer in amount, only about 6% higher than what I actually received.

Q: Brad asked a question on April 7th about phantom distributions. It is worth checking your investment statement to ensure they increase the ACB for capital gains. I have found it is not always done and investment houses don't always understand the proper procedure.

Paul

Q: Good morning 5i
A question regarding the tax status when an option is closed out by buying it back before expiration date. I believe that amount would be credited as a capital loss, if the underlying stock was not sold. Am i right on this assumption?
Thanks

Q: I will have to claim USA 10K profit in CDN dollars so my question is I already paid taxes on $10k. If I decide to convert all my USA holding to CDN dollars will I end up paying double taxes? Plus how do I calculate USA dollar cost on my profit?

Thanks for the 5i research - I have reduced my losses to almost zero.

Thanks for the great service.