Investment Q&A

Q: Hi, if an ETF with a relatively high distribution, say XEI, pays part of its distribution in ROC does that mean the underlying holdings of the ETF do not generate enough dividends on their own to cover the distribution? Thanks.

Q: Hi, could you provide any guidance as to the level of trading in a TFSA that the CRA would consider excessive? Thanks.

Q: Government uses previous year total income to determine if one is qualified for GIS (guaranteed incoming supplement). I would like to know if the GIS received from previous year is also included in the "total income" calculation? The Government of Canada site does not seem to be very clear. Thanks.

Q: Hello Peter & Team
For CRA purposes, can you please very this for me:
If I purchase a security in my investment/taxable account,
do I have to wait for 30 days before I can dispose of the security regardless of gain or loss ?
Thank you.

Q: Will there be a lot of selling pressure on the these stocks during tax loss season. Should I sell now and buy back at the end of the year.

Q: Further to Dave's question regarding the Raytheon spin-outs, once the CRA has granted them eligible under 86.1, they are not taxable until one ultimately sells them. But to elect to use the 86.1, you must file a letter with the CRA (done typically with your taxes, after you have received documentation from the company showing that this dividend (spin-out) was received, and that you are exercising this right under 86.1, to defer the tax due, until sold. Just google how to claim 86.1 cra eligibility, or taxtips.ca also has information on how to claim this eligibility. But most definitely, I believe that if you've received a T3 or T5 or similar, showing the spin-out dividend companies, you cannot ignore it, you must inform the CRA of your intention to defer.

Q: Hello 5I team,
I hear unless you investments in your TSFA are all Canadian, you would be subject to CRA tax.
Is this true?
What about ENB, a Canadian Co but with lots of USA income?
....Thanks ....JC

Q: I have a 100 post split in my TFSA and Dividend stocks are not recommended for TFSA. But the AAPL dividend is so very small so does it matter?
Thanks.

Q: Last April United Technologies became Raytheon and spun off Carrier and Otis. Initially Revenue Canada (CRA) deemed the Carrier and OTIS spin-off values as 100% taxable (incredible I know) as opposed to a 50% taxable capital gain. I know this is not your area of expertise but I'm sure many of your members were affected due to the sheer size of UTX. Do you know if the CRA ruling has been changed or is it still 100% taxable?

Q: You mentioned tax loss selling could hurt Suncor this year - J am not familiar with that concept - when does this typically occur?

Thank you

Q: Hi,
I own both BEP.UN and BEPC in my RRSP. I decided to keep both about a month ago following a response to a question. But now it seems as time goes by that the capital appreciation of BEPC outweighs by far the higher dividend of BEP.UN (at least in my case). Would you still recommend holding both today in a RRSP or to sell BEP.UN and hold only BEPC?
Thanks

Q: Hi, in Aug. I received 21 shares of BEPC from holding BEP.UN and I noticed that the book value was 1270.08 and today it's 1253.99. I think I received it at around 60.67 and today it's higher. Why does the book value fluctuate, and how can I find out what price I got it for.
Thanks, Nick

Q: I am personally fearing that the Trudeau government will sooner rather than later whack us with tax increases to pay for all the current largess. I predict one or more of a) capital gain inclusion going to 75% from 50% b) reduction of dividend tax credit c) inclusion of all or a portion of personal home sales capital gain as taxable or d) GST rate increase. This all of course would affect investment decisions. What likelihood do you see of each of these bombs dropping?

Q: Hi, do you have any comment on this small cap company? thanks.

Q: Just a question about the conversion, and the cost basis of my units. At the end of August, the value shown on my statements agreed to my records. Say it was $100. When I checked today, the cost value is shown at $50. Can you easily answer why the cost would be impacted? Perhaps a problem with my broker? I don't know much (read nothing) about Income Trusts. Thanks.

Q: There was a question about US estate taxation. Here is an article I found helpful.

https://ca.rbcwealthmanagement.com/documents/233544/0/U.S.+Estate+Tax+for+Canadians+in+2019.pdf/ba88e6ce-fb64-4abe-bb57-8a6f4c3dad22

This was a key point in the document, page 5, to focus upon:

American Depository Receipts
(ADRs) — these are exempt from U.S. estate tax because the
underlying share holdings are not U.S. corporations

Q: When taxpayers start paying in 2021 and beyond, for all the gov't covid-19 relief programs, will it be in the form of higher income tax brackets, or a return to a 75% inclusion rate on capital gains tax?
Is there a Federal budget coming this fall?

Q: Hello
I have an 18% gain in BEP.UN in a non registered account. I received the spin out shares in BEPC. Is there any tax advantage in selling the BEP.UN shares and buying the equivalent BEPC shares? Meaning, despite the cap tax gain hit, will the future taxation in BEPC be more advantageous over BEP.UN?

Also I recently bought GOOG C shares maybe by mistake. Is there any advantage to sell them and buy the A shares instead?

Thanks
2 deductions if you see fit.

Q: I would appreciate clarification about US estate taxes. I have found conflicting information on the internet as to when they apply. A BMO FAQ ( http://www.cetfa.ca/files/1551199672_bmo_etfs_-_faq_tax_season_en%20(1)%20-%20Updated.pdf ) states:

High net worth Canadians with worldwide assets exceeding US$11.4M
(2019, indexed to inflation) or have U.S. assets with a value that
exceeds US$60,000 may be required to pay U.S. estate tax on
the value of their U.S. assets. Canadian ETFs are generally are not
considered U.S. assets.

My understanding is that if Canadians held US ETFs, and their net worth was less than $11.4M US, then Canadians did not pay US estate tax. Is my understanding correct? On the internet, I have also seen references ( https://www.taxtips.ca/personaltax/usestatetax.htm ) to a $1.2M US cutoff figure before US estate taxes apply.

Thank you in advance for clarifying this information, and for this wonderful service.

Q: Tax question. If a Canadian donates to a charity not in the Canada, can the donation still be tax deductible? I would like to donate to the wild fire relief in the Pacific NW and can only find US charities accepting donations for that purpose.

Google has an easy way to donate but they say "If you are a resident of Canada, your donation may not be tax deductible. You should check your local tax regulations and consult with a local tax professional to make sure."

I don't have a tax professional so I thought I'd ask here.

Thanks!