Tax on interests between regular and brokerage accounts | Income tax filing | Discussion forum

Please consider registering
guest

sp_LogInOut Log In sp_Registration Register

Register | Lost password?
Advanced Search

— Forum Scope —




— Match —





— Forum Options —





Minimum search word length is 3 characters - maximum search word length is 84 characters

sp_Feed Topic RSS sp_TopicIcon
Tax on interests between regular and brokerage accounts
November 1, 2023
5:02 am
davidgeorge
Member
Members
Forum Posts: 334
Member Since:
May 20, 2016
sp_UserOfflineSmall Offline

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
Moderator
Moderators
Forum Posts: 675
Member Since:
August 4, 2010
sp_UserOfflineSmall Offline

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
Member
Members
Forum Posts: 2981
Member Since:
March 30, 2017
sp_UserOfflineSmall Offline

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
Member
Members
Forum Posts: 1155
Member Since:
November 18, 2017
sp_UserOfflineSmall Offline

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
Member
Members
Forum Posts: 334
Member Since:
May 20, 2016
sp_UserOfflineSmall Offline

Is GIC in brokerage account CDIC insured?

November 1, 2023
10:51 am
AltaRed
BC Interior
Member
Members
Forum Posts: 3122
Member Since:
October 27, 2013
sp_UserOfflineSmall Offline

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
Member
Members
Forum Posts: 7165
Member Since:
April 6, 2013
sp_UserOfflineSmall Offline

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.

Please write your comments in the forum.