Passive Income on Canadian ETFs

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ctocargo
Posts: 2
Joined: Sun Feb 14, 2021 5:12 pm

Passive Income on Canadian ETFs

Post by ctocargo »

Hi,
I'm a Canadian citizen living in the US with a permanent resident card. I'd like to invest my Canadian dollars without converting to US dollars to avoid a currency conversion while exchange rates are not good. My US broker at Fidelity Investments recently informed me that they have brokerage accounts in Canadian dollars where I could buy any action on the Canadian stock exchange. Do you know if owning a Canadian ETF fund in a Canadian denominated account in the US would be considered passive investment for tax purposes? I would prefer to own ETFs instead of individual stocks.

I'm referring to the tax complications of owning Canadian ETFs or mutual funds in Canada if you are a US permanent residents or citizens.
Ref: https://financialpost.com/personal-fina ... x-problems

Thanks in advance
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Passive Income on Canadian ETFs

Post by nelsona »

Yes, these are "PFICs" and require special tax handling which can make them diifcult and reduce theire return.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D
nelsona
Posts: 16793
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Passive Income on Canadian ETFs

Post by nelsona »

You do not need to be in a foreign country for ETFs (and mutual funds) to be considered PFICs.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D
ctocargo
Posts: 2
Joined: Sun Feb 14, 2021 5:12 pm

Re: Passive Income on Canadian ETFs

Post by ctocargo »

OK, thanks so much!
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