BCE

[sprite09]

Sprite..how did you arrive to "a high-income earner would have the DTC washed away, provided they are maxed in their registered accounts? That's not how DTC mechanics work!

Those that are earning Dividends in registered accounts, will not have any dividends taxed and the DTC be applied. It's a straight non-taxable event. In a non-registered event, as you know, the gross up method and the DTC are designed so that individuals aren't paying double tax on corporate profits, which are later distributed to shareholders. The DTC is not an income-tested credit.

If you make these statements, help us understand your POV of how you arrived to that position. Otherwise, it's an opinion with no merit.

I'll be honest...I'll probably won't read any response following this post as it's diverted from the original topic about BCE and no benefit in educating other members lol.

I said those who max out their registered accounts and put a sizable amount in their NON-registered accounts! Yes, I'm NOT talking about DTC for REGISTERED accounts for obvious reasons.

The benefits of DTC are diminished the higher your salary/income level; and back to my point, if you're able to MAX out your REGISTERED accounts, AND area able to put money into a NON-REGISTERED account and buy Canadian dividends in that NON-registered account because you believe they're tax efficient, the you're, on the balance of probability, at a very high income / salary high where the DTC washes away and capital gains are actually more tax efficient.

 

[sprite09]

Finailly, you've explicity mentioned "control" over income. That is one of the real drawbacks of Dividend investing. As one approaches the $100K level of dividend income, the benefits of "oh, I should have done Capital Gains" becomes more & more obvious. However, (a) it's a problem few will have, (b) too much $ is always a good thing.

"benefits of the DTC are washed away" - Then again, don't forget, RRSP/RIF/LIF/Annuities withdrawals are taxed as income, the highest level. In addition, there is the TFSA which could be providing, say using SWR of 4%, $8K to $10K per year and more inthe upcoming years. Thus, if you optimize your taxable account to best offset the RRSP/RIF withdrawals, you can provide the best tax optimized strategy. It's easy enough to simulate where the cross over point is once you have a good idea what the income level is.

You're thinking ONLY capital gains versus Dividends. You're not taking into account the "3rd leg" of income (RIF/LIF/CPP/etc) that can be reduced with the DTC. This is one of the flaws in the "Dividends are bad" arguement that isn't typically taken in to consideration. It's not either or, it's optimization to reduce the amount of "Income" that is taxed.

For those not making a high level of income, say $60K to $90K), it's then the RRSP versus TFSA argument that becomes more important than CG v. Dividends.

1) to those who didn't know, now you know.

2) yes, that is correct within a range, and in fact with the DTC it's a negative tax within this range (ie govt pays you). to which I'll counter; it comes back to flexibility...

one does not need to restrict himself to Canadian-dividend paying stocks; Canadian stocks only are only a small percentage of global equities to begin with (3 percent as I'm sure you aware ) and sticking to only Canadian dividend-paying stocks reduces that even further. thus, one needs to be aware of the sacrifice of diversification and potential returns.

but, again, some people are comfortable and like buying domestic equities (familiarlity/home bias) and "seeing" dividends coming into their account (mental accounting bias). and, i understand, some people are uncomfortable selling their shares to create a "homemad dividend" (for those who don't know, that's the term used in academic literature)...eg my friend has an emotional attachment to a big bank's shares that he "earned " through many years of service .

these behavioural biases can be triumphed via education, but i understand not always. finance is often more behavioural than rational.

TFSa vs RRSP ...diverging here, but in a nutshell for others, if one thinks his tax rate in retirement will be lower than your current tax rate, then you contribute to your RRSP. thus, likely makes sense if you're in the upper tax brackets and makes zero sense if you're in the lowest tax bracket


Enjoy your long Weekend ,everyone.

 

[Michael Lots]

I said those who max out their registered accounts and put a sizable amount in their NON-registered accounts! Yes, I'm NOT talking about DTC for REGISTERED accounts for obvious reasons.

The benefits of DTC are diminished the higher your salary/income level; and back to my point, if you're able to MAX out your REGISTERED accounts, AND area able to put money into a NON-REGISTERED account and buy Canadian dividends in that NON-registered account because you believe they're tax efficient, the you're, on the balance of probability, at a very high income / salary high where the DTC washes away and capital gains are actually more tax efficient.

You need to prove out what you're stating. Cause your statements are contradictory....

 

[Indiana]

 

[sprite09]

You need to prove out what you're stating. Cause your statements are contradictory....

What is contradictory? If you're making well over 100k a year, you're better off paying capital gains vs getting Canadian dividends w/ DTC.

 

[Michael Lots]

What is contradictory? If you're making well over 100k a year, you're better off paying capital gains vs getting Canadian dividends w/ DTC.

Sounds like you don't know how the taxes work lol. You're just making claims/statements. Good to know that this discussion isn't going anywhere.

 

[chodge]

Sounds like you don't know how the taxes work lol. You're just making claims/statements. Good to know that this discussion isn't going anywhere.

Where is the bottom

 

[Carvher]

Where is the bottom

I said on earlier post that I thought it would be 44. It just hit that. Am I buying more? Fuck no.
But if I didn't own any, I would be watching it very closely now because this is a great entry point.

 

[sprite09]

Sounds like you don't know how the taxes work lol. You're just making claims/statements. Good to know that this discussion isn't going anywhere.

keep doing what you're doing...I just hope for your sake you're not in one of the top brackets

 

[sprite09]

Where is the bottom

gosh what an ugly chart lol

rsi is oversold territory...pretty much around the covid dip

if you wanna buy, I'd be comfortable buying at these levels

 

[sprite09]

I said on earlier post that I thought it would be 44. It just hit that. Am I buying more? Fuck no.
But if I didn't own any, I would be watching it very closely now because this is a great entry point.

concur, it's probably bottomed out or close to it

 

[Gators]

Great .. Now I need the stock price to get back to 54 to break even

 

[JohnnyWishbone]

Good entry point...may take over 12-18 months to recover to the 50 mark...who knows..it's a long term income investment stock for me anyway...hopefully by end of year if we have 2-3 rate cuts