Investment Q&A

Q: Hi Peter and 5i team,

I currently have BIPC and BEPC shares in my TFSA account, and I expect to hold them for the long term. Is it worth paying a transfer fee to move those shares to my CAD non-registered account in order to be able to recover any US taxes paid on dividends.

Many thanks for your opinion on this matter.

Q: You commented recently that "U.S. dividends held in a TFSA are subject to a 15% withholding tax". I was wondering if you could describe how this unfolds. This was in a U.S. TFSA.
I am thinking of setting up a U.S. TFSA and would like to know how it works prior.
I realize that a person could ask their accountant but anyone who has this type of account could also tell how it works.
Thank you
Margaret

Q: Hello 5i members,
In one of the recent questions i noticed that you had quite a positive view on Microsoft for growing , in the future. I hold some Microsoft in my TFSA and although I don't like the idea of having to pay US tax on the dividends, I have felt that because I am positive about the growth of mfst and because the dividend yield is only .95 per cent, I am better to keep it in my TFSA despite the dividend tax. I was wondering how you would see a situation like this
thanks

Q: Hello 5i Team
To increase my fixed income allocation, I need to add fixed income to my non-registered account.
I am looking at the Horizon Corporate Class ETFs, in particular the Horizons Cdn Select Universe Bond ETF (HBB) in comparison to BMO Discount Bond Index ETF (ZDB), BMO Aggregate Bond Index ETF (ZAG) and/or iShares Core Canadian Universe Bond Index ETF (XBB). I am not familiar with the concept of Corporate Class ETFs.
1 - Is HBB a reasonable alternate to the listed major bond funds?
2 - Please confirm HBB does not pay a distribution and that “income” is reinvested in units of the ETF resulting in potential increase capital gains in the future.
3 - What would be the impact of a future increase in capital gains inclusion rate (from 50 % to 75%) have on corporate class ETFs?
4 - Is there a minimum dollar amount where the corporate class ETFs start to make sense (i.e. is better to pay the tax on a distribution from XBB when the dollar amounts are relatively small)?
Thanks

Q: good morning. Are there any CRA restrictions/regulations/limits regarding buying and selling shares (trading) within (not between) registered accounts?
as always, i'm appreciative of advice from 5i

Q: When trading stocks is their some kind of 30 day rule regarding when you can buy or sell after loss or gain when you can buy the same stock again could you tell me how that works thank you

Q: Can you tell me why there would be 25% withholding on Raytheon dividend?

Q: Can I open an resp for grandchildren with existing holdings by transferring (opening an resp) there are gains on the stock is it considered a gain.

Q: Dear 5i,
Do you think the CRA will have any concerns with Horizons change from a Total Return Swap structure to a Total Return Corporate Class structure implemented in Nov. 2019?
I understand that Horizons changed all their Total Return Swap ETF's to this new structure late last year. I would like to avoid any future CRA tax issues if I purchase one of these Total Return Corporate Class ETF's. Your thoughts would be appreciated. Thanks

Q: Hello 5i Team
Given 5i are not tax experts, could you please comment on the subject below as I could not find a clear answer.
1 - If I own, in a taxable account, a US based REIT (i.e Monmouth REIT) and if a portion of the distribution is "return of capital (ROC)", is the US ROC treated the same as Canadian ROC (i.e. deducted from the capital cost of the US REIT each year therefore reducing the adjusted cost basis)?
2 - Or is the US ROC "lost" and I pay tax on it similar to a dividend from a US corporation?
3 - I have noticed the US REITs do not post the tax breakdown of the annual distribution as the majority of Canadian REITs do.
Any suggested source of information for this topic?
Thank you

Q: If BEPC is considered an international holding as it is Bermuda based, does the same apply to BIPC.

Q: Hello
Can you please tell me whether the above noted ETFs are included as part of the $ 100,000 limit imposed by the CRA for reporting foreign assets?
Thank you

Q: re: T1135 Foreign Income Verification Form

Hi 5i,
I understand that you are not tax experts but, I would appreciate your thoughts.
I am a Canadian citizen and I have ample cash in my NonReg account such that I can allocate more than $100K to US listed securities on a US exchange. In general, I am interested in purchasing US listed ETF's since they are much cheaper and there are many choices. Are there any drawbacks to exceeding the $100K threshold other than having to file the T1135 form?

thanks for your comments!

Q: I own GSY.DB in my non-registered account. I have given instructions to convert my debenture to shares at the end of the month. I bought the debentures when they first came out at a price of $100.00. What will be my ACB for these new shares? What price do I use when I report a capital gain for tax purposes assuming I have a capital gain?

Q: Hi Peter, Ryan and Team,

From my readings about RESP, the maximum contribution per child is $50,000. What options are there once we reach that limit? Continue investing in an in-trust trading account ?

Thanks.

Q: Fortunately I have been forced into retirement and I do not have to worry about when to take the leap. I am balancing out my portfolio with a strong income focus. My portfolio is approximately 50/50 register and unregistered and I am carrying a large capital loss forward. Which of the above ETF's would be better off in an unregistered account?

Thank you


Stephen

Q: Hi 5i,
Are there any current or future tax disqualifications if I sold for example QSR at a small loss in a RRSP account (no loss tax benefit) to purchase @ the same price within a Non-Registered account exact same time? The reason is to take greater advantage of the div tax credit outside of the RRSP and reallocate the funds within the RRSP to more forced securities such as KXS or even some bond ETF’s. Basically, setting up for retirement & preserve RRSP funds. My concern on the future tax is if worst case scenario played out and the Non-Registered security (QSR) lost further ground a tax loss would be disqualified somehow.

Q: I hold XQQ in my RRSP. I read it is better to receive US dollar dividends via a NYSE ETF. ( tax free treatment ). Can you suggest a similar ETF to replace XQQ ?

Q: I am considering buying LIFE, or maybe HHL. I understand the "withholding tax" issue is best handled by having these ETFs being held within ones RRSP.

A clarification question = If the foreign country withholds income taxes, is this reconciled at the time of filing ones income tax? I thought there was a tax agreement or tax treaty that ensured there was no double taxation. So if one paid taxes to the USA on a certain investment, then you didn't have to pay taxes also in Canada...in other words...no double jeopardy. Or...is my understanding incorrect?

The reason I ask is I like the way my portfolio is constructed and have the funds available to purchase either of these ETFs from within my Cash account.

Thanks for your help...much appreciated...Steve

Q: What are the tax implications of owning bep.un in Canada?