TSX:CHE.DB.E - Post by User
Post by
StormyDon Sep 01, 2019 1:08pm
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Post# 30087257
Jwing: HOT.UN
Jwing: HOT.UNCapharnaum wrote:
For HOT.UN, if you don't own in a RRSP, the dividend is taxed by the US so your net dividend is lower.
Jwing: I have also held HOT.UN for several years now in a non-registered account.
Points to consider: - If held in an RRSP, there is no IRS WithHolding Tax (15% on 60% taxable component of monthly distribution) applied so this is the easiest option (probably).
- If held in non-registered, IRS WHT levied by the brokerage but mostly recovered as a Foreign Tax Credit on the annual filing with Canada Revenue Agency.
- If held in a TFSA - really bad. IRS WHT levied but cannot be reclaimed from CRA. Worst of both worlds!
- Since distribution is approx. 70% Return of Capital, when held in a non-registered account, you apply this to significantly reduce your ACB every year. So in my case, even though the unrealized capital loss on purchase cost is high, the loss cf. ACB is less (and dropping every year).
Those who commented that HOT.UN declined badly in recent years - due to expansion into higher quality hotels which were then subjected to renovations - are spot on. The good news is that the renovations are almost over and that the portfolio of hotels is much higher quality now than initially. So the unit price should rise - but in the world of Trump and other crazies who can predict the future with 100% assurance! LOL!
Good luck!