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Moderator is drppingsoprano

Date: 5/24/2018 3:30:06 PM
Frequently Asked Questions
Author: Wayneman Country Flag
Subject: 19508/19530 - Re: US Stock Question
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Message:
Right.

While the US recognizes RRSPs, they do not recognize the TFSA.
They will withhold 15% for US taxes. In a regular account or RRSP you can claim this 15% against your Canadian taxes owed. Since you don't pay any taxes in a TFSA there is nothing to claim.

Examples:(rough figures not actual rates)

- Canadian stock -pay 30% of dividends to Canada for taxes.
- US stock- pay 15% to US government, pay 15% to Canada.
- RRSP US stock - same as above.
- TFSA Canadian stock - pay no tax to anyone.
- TFSA US stock - pay 15% to US government, pay no tax to Canada.

So if you have a choice, it is better to hold US stocks in a regular account or in a RRSP instead of in a TFSA.

However, if you are willing to give up 15% of dividends to get the remaining dividends plus capital gains, then you can have US stocks in a TFSA.
 
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