Based on buying where? Even if you bought at the top you are being compensated. With a few more months of dividends you will probably be at a break even, and assuming price will recover with bitcoin as it has in the past you will be back into profits pretty quickly if you need to sell... if you don't then who cares? This is all about generating an income while you hold the position. It's a built in hedge. Investors are generally exempt from U.S. withholding tax when they hold U.S. listed ETFs or U.S. stocks directly in a Registered Retirement Saving Plan (RRSP) or Registered Retirement Income Fund (RRIF). So 15% tax plus you pay income tax on total dividend income or just 15% on dividends?
TFSA = Tax Free Savings Account. You pay zero tax. The dividends you receive from US stocks have 15% or more US withholding tax deducted. There is no way to recover that in a registered account. Plus because it is a registered account you can't write off your losses. How come you don't know this? So in your example above reduce the dividends by 15%, that's what shows up in your account. Also I hope you noticed that the dividend has been dropping as the price drops. It's a good strategy in theory, but in real time who knows. A plunge in BTC, (aren't we about due for another dose of winter) will knock the shit out of BITO and it might never recover.
I've never suffered losses! Anyway, if you aren't paying capital gains why would you be able to claim capital losses? Besides, why would you ever sell losing stocks in a tfsa because you are losing contribution room as far as I can figure it. If your contribution room is 100k, and you invest 100k, and the value of your position drops to 0, you have just lost all your contribution room, and will have to start over from 5k or whatever they add for the following year. https://www.canada.ca/en/revenue-ag...e-savings-account-tfsa-guide-individuals.html What if even with dividends, you still suffer a net loss for the year? Would you still owe 15% on all the dividends you collected? People keep referring to this month as Uptober so we'll see...last October was the start of the last run as well. BITO has survived and recovered from plunges before.
ME either, I look forward to them so I keep my capital. I certainly don't suffer when I take a small loss. I sell losing positions to free up capital so I can buy winners. Why tie up your capital in a losing position? I want my capital working for me, not sitting around waiting for the market to change directions. That's one reason to take small losses, so that you don't go to zero. The US withholding tax is deducted before you receive your dividend. You don't get it back!! You'll find out when you get your first dividend. If it was in a non registered account you get to claim for a tax credit for the amount deducted. But then you pay income tax on the full dividend. Death and taxes There is a disclaimer floating around about past performance. BTC always goes up in October, except when it doesn't!!
"Reduced rate of withholding under the Canada-U.S. treaty A reduced rate of withholding tax is generally available to Canadians under the Canada-U.S. Treaty." "U.S. interest and dividend income earned in a Canadian registered account Under the Treaty, there is a special exemption from U.S. withholding tax on interest and dividend income that you earn from U.S. investments through a trust set up exclusively for the purpose of providing retirement income. These trusts include RRSPs, RRIFs, LIRAs, LIFs, LRIFs and Prescribed RRIFs. They do not include RESPs, TFSAs and RDSPs." https://ca.rbcwealthmanagement.com/...cations+of+Investing+in+the+United+States.pdf Ok so apparently the US doesn't want a repeat of 1812 and has given Canadians a tax treaty. I will either be paying no withholding tax if held in a TFSA, or a reduced tax. However I will also receive a tax credit on dividends. Example: If I earn 100k in non-eligible dividends. I will be taxed @ 20.5% (Canadian income tax rates) 100k x 20.5% = $20,500 owed in taxes before any deductions. I can then, because of the treaty deduct another 9% from that...so 20,500*9%=$1845 so my total tax owed would be $18,655, and from that I could get further deductions and write-offs such as interest paid on mortgages etc. https://mccayduff.com/everything-yo...ur dividend is eligible,paid a lower tax rate.
Meh,I've never got excited about dividends. That's your own money they're giving you. It's not income.
BITO has tracked Bitcoin and yield max have tracked the underlying as well. You seem to think dividend stocks only drop in value. It's actually a built in hedge.