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Tax on interests between regular and brokerage accounts
November 1, 2023
5:02 am
davidgeorge
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We can purchase GICs with regular accounts and the interests is 100% added to the income. How about GICs in the brokerage account? We pay tax on 50% of interests as capital gains or 100% of interests as regular GIC account?

Not sure if we already had discussion on this topic.

November 1, 2023
5:06 am
NorthernRaven
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Just because something is in a brokerage account doesn't make any profit on it a capital gain. For a nonregistered brokerage account, GIC interest is regular interest income just like a GIC outside the brokerage account.

November 1, 2023
5:35 am
savemoresaveoften
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GIC interest earned at any non registered account is taxed as interest income regardless how its held.
Registered account means RRSP, RESP, TFSA etc

November 1, 2023
9:05 am
RetirEd
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To qualify as capital gain, there must be risk in investment. Even buying and selling an item has risk that its value may change (up or down). That's the theory behind the tax break, though it bizarrely favours unearned income over earned.

RetirEd

November 1, 2023
10:46 am
davidgeorge
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Is GIC in brokerage account CDIC insured?

November 1, 2023
10:51 am
AltaRed
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davidgeorge said
Is GIC in brokerage account CDIC insured?  

Yes, in virtually all, if not all, cases. The brokerages provide that information on their GIC trade pages.

November 6, 2023
10:39 am
Norman1
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RetirEd said
To qualify as capital gain, there must be risk in investment. …

Risk is not required for capital gains.

There is no risk in buying a Government of Canada 0.75% bond that matures 2024/02/01 at 99.087% of face value and holding it to maturity.

Yield to maturity will be 4.691% per annum. About 0.75%/0.9908 = 0.757% of that 4.691% will be interest for tax purposes. The remaining 3.9% of the 4.691% return will be a capital gain that comes from paying 99.087¢ for each $1 of bond principal and receiving $1 on maturity.

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