Tax paid Dividends

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par4
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Tax paid Dividends

Post by par4 »

Should you keep Tax Paid Dividends in your TFSA?
par4
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Re: Tax paid Dividends

Post by par4 »

I meant to say should you hold stocks that pay Tax Pd. Div. in your TFSA? :oops:
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kcowan
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Re: Tax paid Dividends

Post by kcowan »

The best holding in your TFSA is pure interest bearing instruments. Next best is dividend paying stocks, then pure capital appreciation stocks.

OTOH total return for banks stocks is above 12% per year for 5 years and interest bearing is under 3%.
Big capital appreciation stocks might attract the attention of the CRA.
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AltaRed
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Re: Tax paid Dividends

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I used to think so, but learned from FWF that was so misguided. The largest cap appreciation candidates are best in the TFSA. RRSPs are for interest bearing assets and US domiciled assets. In many cases, if there is no room in the TFSA, eligible dividend paying assets are often best in a non-reg account for the dividend tax credit... at least for those in lower tax brackets. The dividend tax credit isn't as good as cap gains for high income earners.
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StuBee
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Re: Tax paid Dividends

Post by StuBee »

I have come to the same conclusion as Altared. However, I would change my mind if interest rates were to rise significantly (in excess of 5% on a five year GIC) then I would be inclined to agree with kcowan.
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AltaRed
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Re: Tax paid Dividends

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StuBee wrote: 16 Feb 2018 15:13 I have come to the same conclusion as Altared. However, I would change my mind if interest rates were to rise significantly (in excess of 5% on a five year GIC) then I would be inclined to agree with kcowan.
Yes, I'd re-think my position too. I am currently hedging my bets with having MAW104 in my TFSA, after being in a 5 year GIC ladder.
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Spudd
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Re: Tax paid Dividends

Post by Spudd »

What are Tax Paid Dividends?
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patriot1
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Re: Tax paid Dividends

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I remember TD Waterhouse using the code for distributions from income trusts. Not accurate of course, there wasn't any tax already paid.
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Re: Tax paid Dividends

Post by IdOp »

Looking through my accounts at TDDI, they seem to use "TXPDDV" for distributions from Canadian ETFs and also for a REIT pref that isn't pure dividend income. So extrapolating, I'd guess it's for distributions that are likely to be of mixed tax nature, i.e., not always of pure dividend or pure interest.
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Re: Tax paid Dividends

Post by Eclectic12 »

If it is mixed income, depending on the mix - the TFSA is useful for avoiding the updates to the ACB such as non-cash re-invested distributions from a Canadian ETF or small amounts of RoC.

Investments that pay high RoC like 80% plus of the distribution I prefer in a taxable as being able to use most of the $$ paid without taxes is useful. Eventually, it will be capital gains - one of the better taxed types.


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