erniem

High-Yield Canadian Royalty Trusts: What's the Catch?

IF you want to write off the canadian tax as an offset, it can only be done in proportion to the amount of depreciation of physical assets, a difficult calculation.

High-Yield Canadian Royalty Trusts: What's the Catch?

There are a number of issues here. Taxation of Canroys by Ca can be deducted as a foreign tax credit, which means you deduct it from your income..... It is not a tax offset. You don't get to reduce the amount of TAX you pay by the same amount, you reduce the amount you are TAXED ON.

Paperwork on ALL canroys can be difficult. If you buy and sell you need to keep track of ALL of your transactions and adjust the basis according to your return of capital in dividend, length of holding, and number of shares. If you buy one, hold it, don't buy and sell for dividends, you will get a surprise on the tax paperwork. Further the dividend can consist of dividend ( qualfied) and return of capital. Some trusts, like PWE have been paying out 100% dividend, some have not.

So buy and hold, beware of the tax implications of multiple trades, and keep track of ALL dividends, as your sale price will reflect a capital gain that must be adjusted by adding the return of capital dividends to the basis.

I hold PWE and HTE. The PWE is naked, the HTE is hedged with calls sold against the position. I also hold SJT ( US trust) and just sold my HGT ( the appreciation was over three years of dividends, and I could not justify holding onto a large long term capital gain.

Canadian Political Tide Possibly Turning for Energy Trusts

It is pretty much a certainty that such an announcement would add $30 billion to the worth of the above stocks in one day. With reason.

Advantage Energy Income Fund Well Placed for Changes in Canadian Taxation

PWE and PVX are two alternatives that may provide investors with more reserves, stability, and in the case of PWE, similar tax benefits with a large oil sands exposure. AAV was grossly overpriced two years ago.