Investment Q&A

Q: Would there be any withholding taxes on dividends from these products when held in a TFSA ? Joe

Q: Hi 5i Team

I'm thinking of buying ENB. I can use either my margin or RRSP account and either my CAD or USD account (so 4 choices). Question: If I buy using the USD account (so NYSE) does the US withholding tax apply even though it is a Canadian company? If I've filled out the withholding tax form (W-8BEN) does that eliminate the withholding tax in any event?

Thanks
Peter

Q: In response to your answer to the Qs below about the dividend type for A&W:

The dividends paid out are treated as non-eligible dividends (not interest) which means that the gross up and dividend tax credit is lesser than eligible dividends. But you do get the credit and do not pay the same tax as interest income. So I think your answer that the dividends are taxed as income is incorrect.

It is interesting that Boston Pizza's distribution is either eligible dividend or return of capital (all of A&W distribution is non eligible due to the distributions coming from holding company to A&W royalties).

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October 19, 2017 - Asked by Paul

Q: How are distributions from AW.UN taxed? I am a Canadian resident.

5i Research Answer:
Distributions are treated as 'non eligible dividends' and thus are taxed as income.

Q: How are distributions from AW.UN taxed? I am a Canadian resident.

Q: This may or may not be a question you can answer but any insight is appreciated.

My Mom is 88 years old, plays bridge twice a week and square dances twice a week and we spend 2 days a week having lunch She is in great health but, no one lives forever.

She has Property and investments worth U$600,000+ and she and I have reviewed her will which is in good standing. How can I best prepare on my end when the time does eventually come? And what hurdles can I expect as a Canadian inheriting US assets?

Thanks for all you do

gm

Q: I presently have an investment made 3 months ago in this U.S. based company. I was attracted by the fact that it was acquired by Enbridge and pays a dividend in excess of 6 %.
What do you think of this company as a longer term investment ? After receiving 1 dividend payment and noting a 40 % withholding tax , I was informed by RBC that since the corporate entity is an LLC , it doesn't qualify for the 15 % withholding tax. I was also informed that the status would not change, even if transferred to my RRSP account. Does this seem accurate from what you know ?i.e. that an LLC does not qualify for a 15 % withholding tax and that if it were held within an RRSP , that it would still be subject to a 40 % withholding tax ?

Q: I don't know if you can answer this, but I file an 8840 for the IRS as a snowbird to prove a closer connection to Canada (my home and citizenship).
Because I own more than $100,000 worth of U.S. securities, I am beginning to be worried about having a too large percentage of holding in U.S. domiciled companies.
If I own an ADR of a European company, on a U.S. exchange, do I have to list it as part of my U.S. exposure?
My guess is no, but I would sure appreciate some clarity.

Q: Approximately when would you consider buying companies that may have been oversold from tax loss selling? Can you list 3 candidates that may be oversold with chance to rebound in 1H/18??

Q: Hi Peter,

Please list 10 stocks that could see some tax-loss selling but could also rebound next year (good fundamentals, value, etc). I imagine that CRH and CBL could be two candidates? I don't mind any riskier stocks as well.

Thanks in advance.
John

Q: What would be your opinion of selling the above for tax writ off and when should I do this ie what is the latest date
Thank you
Pat

Q: Will you be making any recommendations on probable 'tax loss selling' opportunities?
Using an example of a recent member question about Peyto Exploration. (I don't own it). The price keeps drifting lower yet it appears to be good value at today's price. is it likely to go lower still due to tax loss selling making it a better opportunity in the coming weeks? Are there a number of other stocks acting this way today that you might 'predict' being a better opportunity soon?
Thanks!

Q: I presently hold BIP.UN in a RIF. This is primarily to simplify the tax situation of a limited partnership. Does BAM.A have any tax ramifications other than capital gains if held in a trading account?

Thanks

Ron

Q: I am a relatively new investor and want to understand how the tax loss function works. I have a few questions.

What is the standard taxation rate for capital gains?

How is the tax loss calculated? Is it based on the average cost of purchases or the last purchase or some other formula

I am assuming that you can buy back any stock that you have sold for a tax loss after 30 days. Am I right?

I look forward to your answers

Q: Are there tax implications with holding HXS in a TFSA given that the dividends are not distributed? I have no US holdings, and in my (latish) retirement, I've decided I could use some US exposure. Would it be a suitable single ETF to hold? I could hold it in my non registered account if that would be better, or if you can suggest another suitable ETF that could go in the TFSA, that'd be great. Many thanks.

Q: Hi, recently your answer touches tax loss selling. Are there many more stocks that will fall into this category ? Thanks always.

Q: Do the dividends of BIP.UN and BIP (US), both qualify as allowable taxable dividends in Canada? Right now I own BIP.UN in a registered CDN$ account but am thinking of switching to BIP (US) in a US$ Cash acnt. And in general is it best to keep a Canadian stock like CSU, which also pays its dividend in US$, in a US$ acnt so that the dividends don't have to get converted each time even though I will have to convert, one time, my total CSU holdings into US$ ?
Much appreciated. Great service!

Q: Hi 5i,

I noticed that both ZCL (3.68%) and SIS (2.56%) have decent sized dividends for relatively growth oriented companies. Assuming I have flexibility amongst my registered and non-registered accounts would you recommend these two stocks being in my non-registered account to benefit from the dividend tax credit or in my registered accounts given the higher growth rates of these companies?

Thanks as always,

Jon

Q: I am retired with no pension. I invest primarily in Canadian Dividend stocks and have in effect created my own "pension income" that is taxed at a "low rate" thanks to the Dividend Tax Credit. With our current Federal Government's massive deficit spending and their recent plan to implement "tax fairness" measures directed at private corporations I am very worried that there next tax grab will include elimination or reduction of the DTC despite the fact that the DTC compensates for taxes paid by the corporation and that dividends are paid out of retained after tax profits. If this were to happen, I think there would be a significant negative market reaction since I think the DTC creates considerable demand for Canadian dividend payers. Do you agree and if so which sectors or type of companies do you think would be most impacted? Thanks

Q: If I sell a stock in a non registered account for a loss and want to buy it back in my RIF account do I have to wait the 30 days to be eligible to claim the capital loss?
Thank you Ian.

Q: Are covered call ETF's okay to put in a non registered account vs TFSA & RRSP from a tax perspective vs regular dividend etfs? Does this make things more complicated when filing?
Also what is the opinion of 5i regarding PDF?

Thank you!