Canadian miners HMEnf, IPOOF

[Lbark]

Since these pay dividends how do you not pay taxes in Canada withholding or do you buy in retirement accounts.

[dirtdauber]

A percentage is withheld (at the source) from the dividend payments to your broker and will be shown on the end-of-year 1099s. You may file IRS Form 1116, Foreign Tax Credit, for taxes withheld from taxable accounts. The tax software I use handles this easily. I do not know if you can get back any taxes paid from an IRA.

[Lbark]

do you use turbotax? do you have to list each one or does it automatically pick it up ? So, with ira's we may not be able to get money back? thanks.

[dan_s]

It is best not to own the Canadian dividend payers in an IRA because they still withhold 15% and you don't get it back. However, there is nothing keeping you from owning them or MLPs in an IRA. If fact, one of my wife's IRA's is 100% in HMENF and IPOOF and it is doing much better than her other IRA that is in TRP mutual funds.

HMENF is a pure play on oil. They only hedge with Puts, so they are totally exposed to rising oil prices (a good thing these days). If they don't make an acquisition this year, I expect Hemisphere to pay out a big special dividend at year end.

Read my recent profile on both companies.

[dirtdauber]

I use HR Block, but I speculate that does not make a difference. The 1099s lump all dividends and other special treatments together, so you do not make separate entries for individual holdings, just the agglomerated numbers on each line of the broker's 1099 that has an entry.

[Fraser921]

This is another reason I prefer companies hold on to the cash. They deduct 15 % and you pay taxes on the whole amount.

If I need money, sell down a position

[Lbark]

Thanks to all of you. Very great site. I dont know if any of you are familiar with Jesse Felder of the Felder Report who is very bullish on oil and gold. He just posted a piece to members reiterating a new buy on Devon, CRK and OXY saying they are all back to a EV to EBITDA or around 5 which he said based on unduly depressed energy prices makes them another good entry point.

I will read HMENF reports for i have just started reading the companies reports. Thanks, again

[Lbark]

Thanks to all of you. Very great site. I dont know if any of you are familiar with Jesse Felder of the Felder Report who is very bullish on oil and gold. He just posted a piece to members reiterating a new buy on Devon, CRK and OXY saying they are all back to a EV to EBITDA or around 5 which he said based on unduly depressed energy prices makes them another good entry point.

I will read HMENF reports for i have just started reading the companies reports. Thanks, again

[cmm3rd]

It is best not to own the Canadian dividend payers in an IRA because they still withhold 15% and you don't get it back.

This is another reason I prefer companies hold on to the cash. They deduct 15 % and you pay taxes on the whole amount.

I think these statements may be incorrect.

1. I hold both HMENF and IPOOF in taxable and non-taxable accounts. My monthly statements for the taxable accounts show the dividends received and, separately, the 15% amounts withheld, while the statements for the nontaxable accounts show only dividends received and no taxes withheld. Doing the math (# of shares times dividend amount adjusted for currency differential), the amounts received in my nontaxable accounts appear to be the full amount of the dividend, without any withholding by anyone.
2. In the taxable account, I pay taxes on the full amount of the dividend, but I get a tax credit for the full amount of the tax withheld (foreign tax credit, as someone noted), all automatically accounted for by my broker and automatically entered when I prepare my return using TurboTax.

[dan_s]

I stand corrected, we own a lot of HMENF in Susan's IRA account at Fidelity and they did not withhold the Canadian income tax. I think I thought they were because of the conversion from Canadian dollars to U.S. dollars that lowered it.

Good to know and a nice surprised.