Investment Q&A

Q: A comment. The problem with dividends in a taxable account is that, depending on your other retirement income, the grossed up amount added to your taxable income can cause you to lose your oas. Maybe not an issue if your income is that high but still, something to think about. My rif has a lot of dividend stocks and enough growth stocks that I can make my annual rif payment in cash, generated by dividends, and a transfer in kind of growth securities with no dividend. I also deferred my oas to 70. Also, I believe capital losses are applied to net income so do not help reduce your income for oas eligibility.

Q: Could you tell me if because of these two mergers, were the original shares, ie, AD and POW sold to purchase units/shares in the new trust/company and thereby realizing a capital gain or loss? I cant seem to find this information from the DIY broker.
Thanks
Merry Xmas

Q: I am selling this stock in January from my margin account ( 40% leveraged). After the sale I intend to put the cash in my TFSA. My question is: will this have any consequence with the CRA in regards to investment expense with my margin account afterwards?
Thank you for the great advice over the years!

Q: Just curious, how would the CRA treat the Topicus spin out if CSU were held inside ones TFSA. Would the new shares count toward the yearly contribution room when they show up, or preferable like an attached dividend?
Thank you

Q: Hi, You already mentionned here that ZEM was more "tax efficient" than VEE, since "there is no US withholding tax" with ZEM. From what I can observe,VEE is only including emerging market stocks (and no ETFs or US stock), could you explain to me why VEE would be less "tax efficient" than ZEM ? Regards,JY

Q: 5i staff and readers might be interested to hear (and comment on) the outcome of my recent (Oct-Nov 2020) Nutrien tax loss sale/repurchase in a taxable account. When I sold my 2500 Nutrien shares for ~$137,000 (realizing ~$18,000 loss), I purchased (per 5i suggestion) an offsetting position in Mosaic (MOS.US, another fertilizer company). Over the next 30 days, Nutrien stock price rose significantly, and so when it came time to repurchase the Nutrien shares (after 30 day waiting period), they now cost $153,000, i.e., an increase in price for the 2500 shares almost as much as the realized loss (~$16,000 versus ~$18,000)! Fortunately, the Mosaic position rose in the meantime by ~$21,000, rescuing what otherwise would have been a disastrous tax-loss sale. In the end, I am now back in Nutrien (a long-term hold in my portfolio), but the whole round trip experience ended up with no tax savings (in fact, my net capital gain position increased by ~$3000 (i.e., ~$21,000 Mosaic share gain minus ~$18,000 Nutrien realized loss), making the whole effort unhelpful re: saving taxes. This tale illustrates well the potential peril of tax-loss selling. But thank you to 5i for the suggestion to hold Mosaic during the 30-day period, preventing a really bad outcome.
Ted

Q: I'm down 60% on all three of these and finally taking the tax write off. The good news is that I can use it this year. Would you consider any worth buying back again after 30 days or not ? QST has been showing signs of life recently and perhaps CXI will recover when the world starts to travel again ? What would you do ?
John

Q: I know you generally don’t advise making decisions in what “might” happen, but I need to absorb some capital gains in a non-registered account in the next 6 months and I’m thinking about the potential for changes to the taxation of capital gains. It would seem that taxing capital gains at a higher rate is a likely target to pay for some of debt that government is accumulating due to COVID. Should I hedge my bets and absorb some of the capital gains this year?

Q: Hi,
I have some questions about investing in a taxable account (non-registered) vs a registered account?
1) when to use registered vs non-registered accounts assuming money is borrowed (LOC or HELOC) where the interest can be deducted in personal income tax (high bracket)?
2) what is preferred (to lower tax) to use in case of non-registered account investment assuming one spouse (X) is in the top income tax bracket and the other spouse (Y) is low tax bracket? X and Y joint account or Y only account or X only? Again investment money is borrowed under HELOC (joint).
Thanks,

Q: The 30 day rule deals with a superficial loss not being allowed. However when the security is finally sold all losses are added to the final result. It appears that the loss only has a ti
me factor. Is this true and how does the rule apply to options.
thanks
THOMAS

Q: Good Morning: In a non-registered account that holds US companies (or ADR's) that pay a dividend, is the tax that is withheld seen as a credit for income tax purposes?

Q: Hi,
I hold ETFs (VRE XEC XEF XIC VUN) in my TFSA and RRSP. follwoing questions
1) Are there tax considerations /US-dividend withholding for any one of those?
2) Also, any specific considerations to use TFSA vs RRSP to invest in these ETFs? for example VUN should be used in RRSP.
3) are they good ETFs to investing in long term (8 to 12 years) for growth and income?

Thanks..

Q: What is the date in December 2020 that one can sell stocks in order to claim the gain in the 2021 tax year? Is December 30/20 the date ? Ty

Q: Thank you very much again, you guys are great. My questions are about tax season i have 2 questions to ask so you may take 2 credits off here. 1. I sold real matters back on november 18 on my margin account i am going to write it off as a tax loss this year, now if i re buy this stock after 30 days it will still be this calendar year is it ok or do i have to wait till 2021. And my next question is like i sold real in my margin account if i wanted to buy the same stock the next day in my TFSA account, will that be ok to do. Again thank you very much.

Q: I'm a bit confused about your interest expense deductibility answers on money borrowed in order to generate income. Aside from a line of credit, looking solely at a mortgage, is the requirement in order to be able to deduct the mortgage interest that the borrower use the borrowed funds to invest in Canadian dividend paying equities solely? So the borrower could not deduct interest expense if funds were invested in non-dividend payers? Appreciate the clarification on this.

Q: This is a comment to your answer to Kapil regarding deductiblity of interest. I alawys thought that as long as the money that is borrowed be used to generate income "irrespective of it is a line of credit or a mortgage" then interest on this money is tax deductible.

Q: What is the process for selling an equity for a tax loss, but also giving the same stock to a charity to claim a tax deduction?

Q: I own both and at the share exchange price for TOG will have a loss. In order to realize that loss for tax purposes I assume I will need to sell it. Correct?
If I do sell but want to maintain a larger position in the new company, am I able to purchase more WCP right away without offending the superficial loss rules?

Q: Hello, my question is in regards to TLS. With the recent run up on many of the stocks in your recent TLS blog, what are your thoughts on TLS this month for someone with a lot of cash? Does this change any of candidates on your list, and top US picks? I noticed none mentioned. Much thx!

Q: Potential tax loss selling -- could you please provide suitable placeholders for these companies. Also, if you recommend keeping these "placeholders" instead of switching back after 30 days please let me know.