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Tuesday, January 26, 2010

Talking about beating the steel when its hot...

Today was quite a busy day! I move on with the « ping-pong » thing of mine. So I went to RBC, make a cash advance of 1 000$. But sign a cheque, the one with the promotional offer of 3.9% for 8 month for the amount of 1 400$. I didn’t have my RBC Visa card with me, so I could only withdraw 1 000$ on the spot. The teller was kind enough to take the 1 400$ cheque as deposit anyway. So tomorrow I will be able to withdraw 400$, and make a depost on my line of credit. And save on the interest money. Little saving is better than no saving at all. I took the decision to handle some debts, so now I have to deal with it.

I begin my day this way…. After I went to work. I couldn’ wait or the shift to end because I had a fee things I wanted to do. I have more than 10 000$ that I can invest in my RSP for 2009. I want to make the maximum contribution. Even if my job at the bank is not super, I wanted to take a loan with them for my RSP. The loan on itself is pretty good : no payments are required for the first 3 months. Which is very awesome. I might had an income of a bit more than 40 000$ for the fiscal year of 2009. I really need to invest the max that I can into my RSP – I really cannot afford paying extra taxes this year! So I call RBC about something I wanted to do, not a RSP loan, but my call was about turning into RSP a mutual funds I had with them, the RBC O'Shaughnessy Canadian Equity Fund. Currently, my parts of RBC O'Shaughnessy Canadian Equity Fund are invested into my Tax-Free Savings Account (TFSA). So I call 2 times because the first represnetative told me she couldn’t perform the operaion and I didn’t understand why, the line was cracking from my end. I first call on my break in the afternoon. I gave it a second try later on in the evening, but the answer was unfortunately the same. One possibility would had been to sell my parts of RBC O'Shaughnessy Canadian Equity Fund that I hold in the TFSA and invest the money into my RSP under another mutual funds, but I was not willing to do so. So everything remain the same for now regarding the investment I hold with RBC. Great lol. And now what?

Well, after that, I decide to give TD Waterhouse a call. I explain I wanted to take the Sprott Canadian Equity Fund I have and that I wanted to transform the really same investment into the TFSA account, which its where I currently hold the fantastic Creststreet Alternative Energy Fund. I first ask if I will get any taxes to pay on this, if the move was considered as a sell. The anwer was yes, like I was told before lol. But… Remember that I first invested something like 7 000$ into the Sprott Canadian Equity Fund and that now the investment currently worth less than 5 000$? I would had pay taxes if it would had been the opposite that would had happen. If I would had made money from the investment, I would had pay taxes for moving the investment from a non-register status to a register status. This doesn’t make any sense for me since its not really a sell since I do not cash out the investment, its just a change in the status. But I do not try to understand anymore because finance world just doesn’t make any sense. Anyhow, by tomorrow, my units of the Sprott Canadian Equity Fund will be from my TFSA, among with Creststreet Alternative Energy Fund.

My goal is to evenually sold the Sprott Canadian Equity Fund once it will reach its initial value of 7 000$. When my investment will reach the old 7 000$, guess what will happen? I WILL SELL SPROTT CANADIAN EQUITY FUND. FOREVER. lol…. A 2 000$ lost in my investment portfolio because of Eric Sprott? No no no. NEVER AGAIN. End of the discussion. Let's move on.

So as you can see, today was quite busy and the day is not over yet…. And I have planty of things to say…

1 comment:

ronaldco said...

Sunny, the reason you would have to pay tax if you have a gain, is because it is treated as you sold your shares and you have to pay the tax on the capital gain. Once transferred into your TFSA, no more tax to pay on any gain. If you wouldn't pay it when you do the transfer, when would you pay the tax? When you sell out of your TFSA, see how that could be confusing.

Now to your transfer of Sprott equities to your TFSA. As you have a loss on that investment, I believe you have to wait 31 days before buying it back into your TFSA in order to claim your loss against your capital gains for the year. You should check this out before doing the transfer.

You are right, everything is complicated especially for income tax purpose. You better ever a good tax preparer and keep good records of your investments, especially those .un investments as part of the distributions is a return on investment and not a dividend and that effects the cost of the stock for income tax purposes.

Hope this is helpful!


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