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Canadian Royalty Trust changing to Corp.
Old 12-12-2010, 07:38 AM   #1
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Canadian Royalty Trust changing to Corp.

When Canroys change to a corporation in 2011, will the Canadian tax of 15% for American stock holders be eliminated? I have been holding some stock in my IRA account which does not permit me to take the tax credit on my IRS taxes for the last 4 years.
Thanks, Joe
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Old 12-12-2010, 07:53 AM   #2
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For Canadians these 'entities' when converted are treated like any other Canadian corp. The distributions will probably drop since corporations pay income tax while income trusts pass on their profits to by taxed in the hands of the unit holders. If you own any Canadian corps, the former trusts will be treated the same as those.

What little I know about the Canada/US tax treaty is from the opposite perspective to yours.
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Old 12-12-2010, 08:00 AM   #3
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Quote:
Originally Posted by sailfish View Post
When Canroys change to a corporation in 2011, will the Canadian tax of 15% for American stock holders be eliminated? I have been holding some stock in my IRA account which does not permit me to take the tax credit on my IRS taxes for the last 4 years.
Thanks, Joe

No, Canadians will pay more, but because of reciprocal agreement with US, US citizens pay 15%. May want to check your canroy, not all of them are changing structure. Withholding for US citizens does not differ whether canroy or corporate.
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Old 12-13-2010, 11:54 AM   #4
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As per the tax treaty, the 15% tax is suppose to be dropped by the transfer agent, Depository Trust Company. Until it stops withholding the only broker who will not withhold the 15% for an IRA holding Canadian stock is Schwab.
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Old 12-13-2010, 01:23 PM   #5
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Thanks, I hold it in Schwab!
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