TSX:BPO.PR.A - Post by User
Comment by
pierrelebelon May 30, 2024 11:29am
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Post# 36064478
RE:BPO is HIGH Yielding and you're going to have Capital Gains
RE:BPO is HIGH Yielding and you're going to have Capital Gains
You clearly do not understand tax tables.
Let's say you have 10,000 shares earning $1.70 yearly in dividends for total of $17,000
You would pay about $1530 in taxes, keeping $15,470 after tax.
If these shares had a cost of $12 and the money had been invested in GIC at 5% ($120,000 x 5%) it would have earned $6,000
You would pay about $1860 in taxes, keeping $4,140 after tax.
Basically eligible dividends at 14% would pay less taxes than GIC at 5%.
It is that simple.
Now capital gains or losses are not a factor until the shares are actually sold. When will they be sold and will they generate a gain or a loss? NOBODY has the answer to that question at time of making the investment, NOBODY.
A conservative investor (not a trader) may look at a five year hold and expect a 20% capital appreciation in addition to the dividend yield. The tax calculation could be spread over the life of the investment although the tax (if any) would not be payable until after disposition.
In conclusion, you should not worry about how other posters plan their tax liabilities since you do NOT know their personal circumstances.
On the other hand if your overall investment portfolio is about $100,000 or less, it makes sense to have it all in a TFSA. Investors with larger portfolios need to make decision that work for them.
PS - GICs held in a RRIF do not generate any taxable income as such. The income accumulates tax free. Only the withdrawals are taxable (as pension income, eligible for pension income deduction). This is where we hold most of our GICs.