Has anyone used Credential Direct? Can anyone suggest if any on these online brokers are good, VB and Optionshouse. This would almost mean that the superficial loss rule would always apply either for myself or my wife since we both hold dividend paying US securities in our accounts. I send a payment to a money market fund every paycheck and then invest it balancing as I go. Geoff May 25, at
The initial Euro cash balance is:. This results in a deemed disposition of U. To do so, create a new security for each foreign currency as follows:. Each transaction can be inputted as a buy or sell transaction for U. Here is the first transaction from the example above:.
This is a buy transaction because U. For all transactions on U. This results in the following transaction:. All values in the transaction list are shown in Canadian dollars. The remaining transactions can be entered in a similar fashion. For the purchase of Euros two transactions must be inputted: Similarly, for the purchase of YHOO you must enter two transactions: Particularly, once you already have foreign currency and there is an appreciation in the FX rate before you purchase a foreign stock, there is a deemed disposition of the foreign currency when you purchase the stock.
Am I correct that this is still considered US cash the same capital property and that simply moving the money between the brokerage and the bank fund does not constitute a capital transaction? However, I can see reasonable arguments for either case when redeeming units of a U. On the one hand, this mutual fund behaves just like a U. On the other hand, TDB is technically a mutual fund, so an argument can be made that selling units is considered a disposition.
When you sell an index fund and purchase another index fund tracking the same index, a deemed disposition has occurred, even though the underlying holdings remain the same or similar. Similarly, if you sell a fund that contains a combination of cash and other securities, you would not be eligible to avoid capital gains on the cash portion.
If the amount of potential capital gains is relatively small, I would suggest tracking the ACB of TDB separately to avoid any trouble. This is especially true if you expect to deploy the U. Just be careful about capital losses — in this case the superficial loss rule would likely apply.
For transactions involving TDB, you can multiply the number of units by Thanks, I appreciate your thoughts on this. As you suggested, I did some further checking. Deposit of a Canadian bank Additional Information: It is not issued by prospectus. I contacted CRA with this information and spoke to an agent who said he could answer questions about reporting gains on foreign currency transactions.
I posed a scenario where I held US cash for 45 days between selling one security and buying another, and moved the money into the TD savings product for 30 of the 45 days. Hi, Just want to clarify for myself. Thanks in advance, Regards, Ana. If you spend foreign funds directly without first doing a conversion, a deemed disposition will still occur. Suppose you only have US dollars from the start and buy a US stock.
This could be quite expensive or do you just report the capital gain due to the stock going up and remove the amount of the foreign exchange? ACB should always be tracked in Canadian dollars, and foreign currency is treated similarly to any other investment such as stocks.
When you purchase US stocks with US cash, a deemed disposition of the US cash occurs which results in a capital gain or loss. When you later sell the stocks, your gain or loss is calculated based on the value of the proceeds in Canadian dollars, even if the proceeds are not converted back into Canadian dollars and in this case it would be as though you simultaneously purchased US cash, which would add to your ACB of US cash, even though no foreign currency conversion has taken place.
How would the tax treatment when I buy a US stock with the proceeds says in year 3? Even though the explicit currency conversions in 2a and 3a may not have actually occurred, this is how it works for tax purposes.
A capital gain or loss will apply for 2a and 3a. Should the BOC exchange rate at noon on trade date has to to be used? Do yo think if it is acceptable to CRA? You can use the actual exchange rate from the conversion which would be advantageous due to the spread. Spending foreign currency results in a deemed disposition of the foreign currency, so a capital gain may apply.
According to ITR http: So if you borrow US dollars and invest the borrowed funds in shares and the transactions for the shares are on capital account, then any gain or loss resulting from borrowing US dollars would be considered as part of your total gain or loss.
For an example please see the following:. We are new immigrants and came to Canada with our US dollars earned before we arrived. We have kept them in a US dollar account in Canada. When we arrived the dollar was close to par with the CAD. Would we liable for capital gains tax: On US dollar expenditures from our US dollar account when abroad — holidays for example? The moment we invest same US dollars in stock quoted on US stock markets?
With the current exchange rate, we will be realizing several thousands of dollars when converting the money from U S to Canadian……. Thanks for this great article. I am confused about one point. I would have thought the calculation of the ACB of the Yahoo shares would use the internally generated exchange rate of the US cash account.
Thanks for your comment. However, there will be a capital gain or loss realized on the property. Note that there are many other tax considerations on the sale of foreign property, aside from capital gains.
How to determine the adjusted cost base? The money going into the account and interest had tax paid on it. No disposition occurs at maturity unless or until the funds are converted to another currency, or used to purchase a negotiable investment or other asset. Term deposits, guaranteed investment certificates and other similar deposits which are in fact not negotiable, are considered funds on deposit. In this case the following transactions would occur:. S company based in Canada. S bank account and then use that money to travel and spend in the U.
One entry in adjustcostbase. The exchange rate is the same as 1. I would agree with the first two transactions. A data subscription is not directly related to the purchase or sale of a specific stock. How about doing a transfer of investment account from one firm to another, I think we can include that as a fee.
How do u enter that in the adjustcostbase. Transfer fees cannot be added to adjusted cost base. It also note you must use the same type throughout the year. Does that mean I can use monthly for one year and then switch to yearly for another year in order to minimize the tax? In that case of yearly exchange rate, it may seem beneficial for may be even better as we only use one rate throughout the year, it may reduce the USD gain.
However, the CRA has contradicted itself by releasing the following statement that appears to only be available in French:. An average rate may be acceptable for items of income, but not for capital gains.
I have never heard of a monthly rate being recommended for calculating capital gains, so I would suggest sticking with either the daily rate, actual rate, or annual rate. In general I would recommend using either the actual rate or the daily rate. In cases where an actual exchange has occurred as opposed to a deemed disposition , I would recommend using the actual rate over the daily rate.
This is because the currency conversion spread the difference between what you pay to buy and sell currency will reduce capital gains slightly. I would also recommend being consistent with your choice. The reason I ask is that it seems the exchange of cash and a prior investment are two separate unlinked transactions for tax purposes. I would say you should pay no tax on the conversion because it was already paid in the investment calculation.
Are GIC transactions — all within the same foreign bank account — recognized by the CRA as separate transactions as though they occurred in a brokerage account? If they are treated as equities i.
When buying a GIC with foreign funds, two transactions occur: When the GIC matures — whose principal expressed in the foreign currency has not changed i. It has the effect of increasing ACB. So it sounds like there is not even the issue of mixed funds like in the UK. All accounts are aggregated together even if US to CAD conversions occurred from one account one must consider the ACB for that transaction including funds from separate accounts?
Yes — ACB is calculated based on the notion of identical property. Thank you, one last question that confuses me a bit. Always either the capital gain was calculated correctly on a T with box 20 and 21 filled in by the broker even if you used a margin loan or you just calculate the buy transaction in CAD on a gross basis and then subtracted the sale proceeds converted in CAD on a gross basis.
I am setting on RESP this week, but I already have a few e-series accounts and there are no early redemption fees on the Money Market stuff. I send a payment to a money market fund every paycheck and then invest it balancing as I go. Never was charged a fee in over 4 years! Their target maturity dates currently are , , and If the investor holds the investment to maturity, they are guaranteed to receive the higher of 3 guarantees: The funds automatically become more conservative as they approach their maturity date.
They are automaticall rebalanced, so that the investor does not need toworry about selling equities and buying fixed income securities. I am new to your site and would greatly appreciate it if you can clarify a few things for me.
My son is now 17 months old and although I wanted to start conrtibuting right when he was born I got harrassed by so many RESP agents that I just gave up because I was so confused on which route to go. I dont even know how they knew I gave birth and how they got my contact info but they did! What threw me off was the fees! The first few years all your money is going towards the fees and not towards the RESP. Then I came accross a broker who metioned Industrial Alliance — this is what they offered:.
There are NO upfront fees with the plan, but there are internal fees for the Segregated funds 3. This is what I was going to go with until I read your post here. I would greatly appreciaite your recommendation if this is a good choice or do you think I should go with the TD e series you mentioned. About the TD e series, I am abit confused as to where to you invest the money, is it in stocks mutual funds? If you can kindly clarify where the money is invested and at what rate, it would be apprecaited.
Once we pay the fees above we will get less money than what we contributed. I believe somewhere around 3. If I had started with TD then I surely would have seen significant losses in mutual funds.
At a minimum I wish they would paint a more accurate picture. Leave this field empty. LinkStuff — Pushups Edition. Receive free email updates:. Canadian Discount Brokerage Comparison. Also, safety of funds is my biggest concern. Any comments on the security of the smaller operations? Now QTrade is best by far.
I then had Scotia for the bond a buck and commission free ETF. So, now QTrade gets my business Do the brokerages engage in hypothecation and re-hypothecation of the clients assets, if so what are their policies in this regard? I am a foreigner looking for a brokerage where I can trade the Canadian stock exchange in the name of a trust. Any information you can help with would be most appreciated.
I learned the hard way that you have to read the rules very carefully and some of the selection boxes are very confusing. I had trouble with Scotia i-trade since it was e-trade but it is getting worse.
I had most of my money with Scotia McLeod, the fees were high but I had confidence in them. I am going to try some of the others to see which one suites me. I learned never to have US and Canadian accounts with the same brokerage. One of the statements gives them the right to move money and charge the exchange fees even if you have funds in the same currency.
Ca n you tell me which statement this is — I am curious as I have never assumed they would do this unless you lacked funds to settle a trade or pay a fee. As pointed out, researching all this information for the various brokerages is tedious.
I know TD Waterhouse does, but I think they are alone in that. Anyway great job laying out the comparison, very helpful. Thanks Mike for your comparison. I would love to read more about how do people like the different trading platforms. I tried Quest Trade and did not like it. Does anybody have a comparison of platform fees? Scotia ITrade are introducing minimum account balances and annual fees for registered accounts. The deadline for existing clients was tomorrow but has been extended to Sept The comparison table needs updating.
Here is the information I was sent:. I did a lot of research and find them to be the best priced online trading firm in Canada. I confirm your comments on Scotia itrade fees. Has anyone used Credential Direct? Welcome comments on this idea…. Dark Helmet — The article was written a couple of years ago, but as the title suggests — I try to keep it up to date with regular updates. Less than that amount means very high commissions at the bank brokerages.
So far, VB has been an absolutely horrible experience. Most of the staff is incompetent. Phone wait times are huge. The trading platforms are messy, and some give you incorrect or incomplete information. The statements are bad. Trade rejections are commonplace, and they never tell you why. I was happily trading with Options Xpress but they transferred all their Canadian accounts to Virtual Brokers.
Their site is confusing and totally bewildering with 3 different plattforms. Takes forever to connect with someone on phone. I trade options strictly as stock substitutes exclusively employing puts and calls. Anyone have a suggestion for a better alternative? Been with Virtual Brokers since the takeover of OptionsXpress. I am mostly an income investor.
Dividends arrive several weeks late, if at all. Requests to transfer funds to bank are ignored. It appears that once they have your money, they will never let you have it back! You will not be eligible to receive discounted re-investments or enhanced dividends offered by many companies. Kevin is spot on about Virtual Brokers.
Your application will fall into a Black Hole. Does anyone knows which brokerage firms provide capital gains report for transactions? I am currently with Questrade but only get a summary of transactions. I have heard some of the big banks offer complete capital gains reporting, is it only for high net worth clients? I have the same questions as Karen O. I have an account with Qtrade.