SteveB/Colorado

High-Yield Canadian Royalty Trusts vs. Dividend Growth Stocks

I agree: interesting reading, especially the emphasis on portfolio diversity. I'm not sure, however, that the author is fully up to date on the CanRoys. Following is from the May issue of Leeb's Income Performance Letter (note: Dr. Leeb is historically bullish on energy stocks in general and generally bearish on the CanRoys).

His associate writes, in a review of HTE, "Under a 2006 proposal, Canadian trusts would be taxed like other corporations (at the 31.5 percent rate) beginning in 2011. Trust shares tumbled when the news hit because this would eliminate their major advantage. But other plans have since surfaced including bringing the tax back to 10 percent and not allowing any more trusts to be created."

It would appear that the plan for the big change at beginning of 2011 is not a done deal. Or to put it differently, cooler & smarter minds may yet prevail in Ottawa.

For Konchan, you can recoup some of the Canadian taxes you pay when you file your US tax return by completing form 1116.