Buying Foreign Stocks
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Buying Foreign Stocks Our club is considering purchasing stock in Canadian company Aurora Cannabis (ACBFF), which is slated to trade on the NYSE as ACB by the end of this month. Our question regards taxes. How does owning foreign stocks complicate our taxes, if at all? Thank you for your input. Vickie We used to own Canadian National Railway. They withhold a portion of any dividend paid. You bookkeep it and distribute it to the partners on the K-1. They use it to reduce US taxes, usually an insignificant amount. Joe
Vicki, For taxable accounts the problem is just a matter of accounting for any foreign taxes paid when you do your taxes. For non- taxable accounts (IRA’s etc) it could create an unnecessary loss. The reason is if the foreign country withholds taxes there is no way to get credit for the withheld taxes. Shell is a example when one share type (RDS.A) represents one country and another share type (RDS.B) represents a different country. In this case it is safe to hold the RDS.B in a non-taxable account as the RDS.B shares are British and there is no withholding. The RDS.A shares are dutch and they do withhold. Bob > On Oct 11, 2018, at 12:18 AM, Vickie Rabourn via bivio.com <user*26711600001@bivio.com> wrote: > > Our club is considering purchasing stock in Canadian company Aurora Cannabis (ACBFF), which is slated to trade on the NYSE as ACB by the end of this month. Our question regards taxes. How does owning foreign stocks complicate our taxes, if at all? Thank you for your input. > > Vickie Hi, First of all, you would not want to buy a foreign stock that was not traded on a US exchange as an ADR. You could keep records in bivio for many of them, but it's important to understand that because they are foreign stocks, they do bring with them the potential for accounting issues arising should they undergo any sort of reorganization or special distribution. Foreign companies often do not provide information on the US tax implications of such events. This may cause delays and problems in being able to update your club information on a timely basis. It becomes up to your club to determine whether the potential for extra work or delays getting your records updated correctly is something you are comfortable with.
Many thanks to Laurie Frederiksen, Joe, and Bob for your replies. Your helpful input will make our club's decision to buy or skip ACB easier. ~Vickie On Thursday, October 11, 2018 9:06 AM, Laurie Frederiksen <laurie@bivio.biz> wrote: Hi, First of all, you would not want to buy a foreign stock that was not traded on a US exchange as an ADR. You could keep records in bivio for many of them, but it's important to understand that because they are foreign stocks, they do bring with them the potential for accounting issues arising should they undergo any sort of reorganization or special distribution. Foreign companies often do not provide information on the US tax implications of such events. This may cause delays and problems in being able to update your club information on a timely basis. It becomes up to your club to determine whether the potential for extra work or delays getting your records updated correctly is something you are comfortable with.
We are a new investment club and will be looking to buy ETFs focused on the cannabis industry. I would appreciate any thoughts on the ease of this type of investment in terms of reporting and tax issues.
We are a new investment club and will be looking to buy ETFs focused on the cannabis industry. I would appreciate any thoughts on the ease of this type of investment in terms of reporting and tax issues. Foreign taxes are taken from any dividend before you get it so it's pretty simple. Bivio does the tax reporting so no problem. Lee Weygandt Market Miners Investment Club, Findlay Ohio -----Original Message----- From: Val Johnson via bivio.com Sent: Friday, August 16, 2019 12:08 AM To: club_cafe@bivio.com Subject: [club_cafe] Re: Buying Foreign Stocks We are a new investment club and will be looking to buy ETFs focused on the cannabis industry. I would appreciate any thoughts on the ease of this type of investment in terms of reporting and tax issues. |
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