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Strategies & Market Trends : Ride the Tiger with CD

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To: Cogito Ergo Sum who wrote (25933)	2/24/2005 6:52:31 AM
From: TheBusDriver	Read Replies (2) of 312259

Got this from Penntrade today....seems to many Americans like the CDN trusts and the Canadian gov't has decided to close a loophole....this could have a negative effect on some trusts...donno... * THIS TAX NEWS APPLIES TO CANADIAN INCOME TRUSTS HELD IN US-OWNED IRA'S * If you own Canadian income trusts in your IRA, the following new change will affect you. In the past, US-owned IRA's that held Canadian income trusts were generally exempt from Canada's 15% dividend withholding requirement. This is no longer the case. Our clearing firm explains that the Canadian government has changed its interpretation of the governing tax treaty. Canada no longer interprets Article XXI of the 1980 "Convention Between Canada and the United States of America With Respect to Taxes on Income and on Capital", as amended, to exempt US-owned IRAs from the 15% withholding of dividends. Thus, as of February 15, 2005, the Canadian government began subjecting US IRA's to the same 15% withholding requirement as other US accounts. The 15% that is withheld from taxable accounts may likely be recovered as a foreign tax credit. But we believe this isn't possible with an IRA. The information from our clearing corporation concerning this withholding change generally accords with a recently published report by Roger Conrad's Canadian Edge newsletter. Canadian Edge is an authoritative source that specializes in news, tax information and investment recommendations on Canadian income trusts (www.canadianedge.com). We cannot provide individual tax advice, so we offer this news as a service to you for general information only. Please confer with your personal tax advisor for specific guidance concerning your individual tax situation.

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