Return of capital reduces the basis of the investment so that you pay capital gains when you sell it.
So far, the US IRS has accepted my making an adjustment to my 1099-DIV reportings and providing documentation that this is return of capital. I could probably get my broker to report it correctly, but since this works, I am sticking with it. Same treatment prevails in Canada. Look up Return Of Capital in relevant tax code or tax information.
Anyway, no taxes are due in the year the distribution is received. I do not understand the mechanisms that allow this, but accept the Brompton explanation.
In the U. S., if you die, there's no tax due at all. In Canada, taxes must be paid after death. I think.
My enjoyment of this tax perk has been considerably spoiled by the actions of Mssrs. Harper and Flaherty RE: Canadian trusts. I have a 40% loss on my original investment. There is always the possibility of another change of government or change of policy. Harper is a liar, a scoundrel, a fool, and a traitor. He is much more dishonest than George W. Bush, who is merely a fool and a bastard. It is possible that Canadians may start to see Harper for what he is.
AOG.UN may offer an outstanding value to new investors at this moment. Or not. I continue to hold for generous income and diversified energy holdings, especially natural gas properties. |
