Passive Income on Canadian ETFs

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ctocargo
Posts: 7
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. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
nelsona
Posts: 18314
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. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
ctocargo
Posts: 7
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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