USD holdings in TFSA | Investing | Discussion forum

Pipersierra said
Interesting. Just found out ScotiaItrade receives all dividends in Canadian dollars. So even if you have a US side to your account, the originating dividends in USD are converted to CND then converted back to USD. So much for that idea.

That doesn't sound right. According to this Scotia iTRADE help entry, the US$ side should receive the US$ dividends in their original US$:

How does the U.S. side of my registered account work?

Your registered account can hold U.S. dollars and securities, allowing you to purchase, hold and trade U.S. dollar securities in your account. If you currently hold U.S. dollar denominated securities in the Canadian side of your registered account, you can move these over to the U.S. side, allowing you to receive any distributions in U.S. dollars.

For more info on moving your securities, go to the Account Details for your registered account > Additional Services > Transfer Securities Between Accounts. Or call us at 1-888-872-3388.

Could the US$-side holding be not properly set up? Canadian companies that declare US$ dividends will often convert and pay them in C$ when the shareholder is a Canadian resident, unless otherwise instructed. For example, from the bottom of Brookfield Asset Management (BAM.A) Distribution History:

Please note that the quarterly dividend payable on Brookfield's Class A Limited Voting Shares is declared in U.S. dollars. Registered shareholders who are U.S. residents receive their dividends in U.S. dollars, unless they request the Cdn. dollar equivalent. Registered shareholders who are Canadian residents receive their dividends in the Cdn. dollar equivalent, unless they request to receive dividends in U.S. dollars. …

Joe said
Also remember a USD TFSA does not work like a USD RRSP. You are not exempt from a US stock tax witholdings (15%) in a USD TFSA, but you are exempt in a USD RRSP.....but the Capital gains of a USD stock in a USD TFSA are exempt.

That's because TFSA's fail to meet the third condition required for the exemption under paragraph 2 of Article XXI (Exempt Organizations) of the Canada-US tax convention:

2. Subject to the provisions of paragraph 4, income referred to in Articles X (Dividends) and XI (Interest) derived by a trust, company, organization or other arrangement that is [(a)] a resident of a Contracting State, [(b)] generally exempt from income taxation in a taxable year in that State and [(c)] operated exclusively to administer or provide pension, retirement or employee benefits shall be exempt from income taxation in that taxable year in the other Contracting State.

Canadians are generally exempt from US taxes on capital gains from US stocks under Article XIII (Gains):

4. Gains from the alienation of any property other than that referred to in paragraphs 1, 2 and 3 shall be taxable only in the Contracting State of which the alienator is a resident.

I hold CocaCola and Intel on US TFSA at TD and dividends remain in US$

Bud said
Can US$ be swapped for CAD to a rsp/rif/tfsa without tax implications. For example put into registered plan US$ at the same time pull out an equal amount of Cdn$ ?  

No, at the time you transfer your USD holdings to registered accounts (from non registered accounts), it is considered a "sell" transaction (even if you transfer in kind) and you pay all the income taxes (for capital gains etc.) and the price of the transaction will be determined as a new booking prices for the holdings in your registered accounts.