Best USD Index/ETF investment for margin account

[poxpower]

What do you guys get as ETFs that track the SP500 but don't get taxed as if they were US holdings? Trying to understand the tax implications of holding US vs Canadian dividend-yielding investments...

[Sisko]

Not sure that I understand your question, but there is no way to get US dividends to be taxed like Canadian dividends... They are always going to be taxed at a high rate like income. That's why they are better held in RRSP or TFSA until those buckets are full.

That said, there are a few things that can be optimized by holding US listed vs Canadian listed ETFs. Here's what I do:

In RRSP I use VTI.
In taxable I use VUN.

Those are both total market, I believe the S&P 500 equivalents are VOO and VSF.

In the RRSP VTI saves the 15% withholding tax over VUN. It's US listed but I personally don't mind switching currencies in my RRSP with Norbert's gambit.
In my taxable account - VUN charges 15% withholding, but I believe this is recouped when doing taxes so it doesn't matter. I also don't want the complexity of tracking US dollars in my taxable account. There is also reporting requirements if you own 100,000 of US listed stocks directly, I think.

I think that is the optimal way to do it. If there is a better way I'd like to know.

[poxpower]

but I believe this is recouped when doing taxes so it doesn't matter.

Can you expand on this?

The 100k in stocks is not counted by ETFs?

My question is basically: What Fund do you get to avoid getting dividends as much as possible. Though honestly it might not matter because it's like a few hundred bucks a year.

I think my accountants might have no clue as they quoted my holding account as having to pay 10k in taxes this year, despite it selling nothing and making a few hundred dollars in dividends. Trying to understand if I screwed up something royally or if they have no idea what they're talking about and can't ask the right questions ( and if it's time to fire them ).

[Sisko]

For the recouping of withholding taxes...
You get a T3 slip at end of the year from brokerage. Looking at mine, in the "other information" there was info for box 34, which is "Foreign non-business income tax paid". This goes into form T2209 and ends up coming straight off of your federal tax owing. I THINK that is how it works.

The $100,000 I mentioned is just if you own assets directly in the US, so a ETF listed on a US stock exchange like VTI would count towards that. But this just means you would have to fill out form T1135. I've never done it myself, but don't think it's actually a big deal, or has any tax implications.

I don't know how you would get a 10K tax bill if you only made a few hundred dollars in dividends and didn't sell anything. That 10K is just from your investments? Did you accountant explain it to you? Did you have some unusual ETFs? I don't know, did you have 2 million dollars in a high interest savings account? Your T3 and T5s have all the relevant information for investment income, any big numbers on those?

[poxpower]

Did you accountant explain it to you?

No and that's why I'm thinking of firing them lol.

That account only has VOOG and VUG, both have like <1% dividend yield.
Sold nothing. The 10k they quoted makes no sense and they haven't explained a damn thing in weeks.

I've very sick of picking up after everyone with finances. The government, the bank and the accountants. I just want people to leave me and my money alone.