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[Music] >>Hello I'm Greg Bonnell and welcome to MoneyTalk Live, brought to you by TD Direct Investing.
Every day I'll be joined by guests from across TD, many of whom you'll only see here.
We we'll take you through it's moving the markets and answer your questions about investing.
Coming up on today's show we will discuss what you should be thinking about when it comes to your personal finances as we approach a new year with TD Wealth Nicole Ewing who will join us.
MoneyTalk's Anthony Okolie will look at Canada's latest retail sales report and what it says about the health of the consumer.
And in today's WebBroker education segment, Bryan Rogers will show us how to find it dividend information on WebBroker.
So here's how you can get in touch with us: just email us at moneytalklive@td.com or fill out the viewer response box under the viewer player here in the platform. Let's get you an update on the markets, will start here at home on Bay Street with the TSX Composite Index. We have some green on the screen. Up a fairly healthy 154 points, about three quarters of a percent.
We have the price of gold moving higher today, crude having just made some sizable gains over the past couple of sessions then that swoon in the afternoon session yesterday, Wall Street and Bay Street seemed to be recovering from nicely. Air Canada is one of the movers today to the upside, let's check in on the big airline.
18, setting on Europe a little shy 3%. BlackBerry however, latest earnings in the street now making rather not making what they saw either.
More about their path going forward as well, down about 13% for BlackBerry shares at this hour.
South of the border, you did have that swoon in the afternoon, the best explanation I'm seeing as it's been a pretty good run as you can see from near the end of October into recent days, perhaps a little profit-taking yesterday afternoon. We seem to be back in a buying mood although you have to assume that volumes, transactions, starting to get a little thinner out there as we had closer and closer to the holiday week. 31 points on the board though, you're up about two thirds of a percent. The tech heavy NASDAQ, what's happening in that space against the broader market, up almost a full percent of the hundred and 34 points in the table and micron, one of those tech names moving to the upside today, they like the forecast and the company itself is saying they think they're starting to see signs there will be a rebound in demand for the memory chips so important their business next year.
You have micron up 7 1/3%.
And that's your market update.
As a new year quickly approaches, you may want to carve out some time over the holiday season to consider how your financial house could get an order for 2024.
Joining us now to discuss more is Nicole Ewing, Director of Tax and Estate Planning at TD Wealth.
Nicole, great to see you as always. Grass >> To be her Greg.
>> We have a bit of a crunch over the next couple of days but hopefully people have some downtime over the break heading into 2024.
What we need to be keeping in mind?
>> Well we've got some great news heading into 2024 in terms of the TFS they limit being increased. So that will go up to $7000 and it will also allow any contributions taken out and regenerated. You'll have the opportunity to re-contribute those funds as well.
So we are looking at total contribution with starting in 2009. Eligible the whole time you will land on $95,000 of contribution room to be able to continue to earn funds in the account tax-free and take them out tax-free.
So that's good news, I think, an extra $7000 of tax-free contributions is certainly good.
>> Very positive heading into 2024. Thinking about that as part of a strategy for building wealth over time at estate planning. What about, you and I've talked with this several times throughout the fall. The change to the alternative minimum tax. What people need to be aware of on this front as we get closer and closer to 2024?
>> That's one of the few changes coming in 2024.
So the alternative minimum tax, just to make sure everyone is aware, is essentially a parallel tax calculation that is done right alongside the normal tax calculation that you would do. And what's changing next year is the way that the calculation is going to be determined. So the credits that would be included, the deductions that would be included, the exemption amounts, those are all changing quite a bit and depending on your personal circumstances, if you're somebody who earns a significant income, passive income… Capital gains… Or if you make significant contributions to charity, you might be caught by these rules.
And we've also seen the increase in the exemption amount go up from 40,000 to 173,000. So quite substantial. But that doesn't apply to trusts so if you're earning income in a family trust, you really want to make sure that you look in to see how that calculation might be impacting you, perhaps there are ways to do quick withdrawals, while you're still in 2023. But just to be aware of some of those changing the rules. As with anything, we want to be thinking about that sort of strategy in terms of your overall strategy.
So how is that impacting your, your RRSP contributions, your TFS they contributions, do you have the opportunity to, perhaps, earn income in a different way?
With the change of the AMT rules, one of the big changes is the ability to carry forward some of your losses and for the purpose of that calculation, so you want to make sure that your factoring into your overall cash flow and savings and investment strategies.
>> There are some interesting things there to keep in mind. I got an email in my WebBroker inbox this morning reminding me that if you want to sell security, to realize the capital gain or loss for tax purposes, your time is running out. I mean we are not even talking about a matter of weeks.
Were talking about days. Very close to those limits.
>> I'm very reluctant at this point to be talking about year-end tax planning because to be frank, this is the year end. It will take some time for those Securities and those trades to be processed and so now is really not the time to be making panicky decisions.
We want to be making our tax strategy really, throughout the year.
In looking at things, October, November, if we need to do any of our year end strategies, but there are certain things you could do.
So for example, you might want to… If you're planning to buy a home next year, and you qualify for the first home savings account, you might want to hurry up and open that account. Now.
That would give you carryforward room into 2024 so will allow you to make two contributions of $8000 and that way you've doubled the amount that you can utilize towards that home.
So there are some last-minute things, the same with charitable donations.
If you're doing a direct gift, you still have time until December 31. But, if you're thinking of doing it was really effective giving strategies, like donating publicly traded Securities that have an accrued gain, that deadline is now. Because there will be a little bit of a delay in getting some of those things processed and over to the charities and time.
But it is too late, I would say, for some of the strategies that may take a little bit longer to implement.
But we still do have the opportunity to do some last-minute things. Again, we talked about the TFS a, if you're planning on using some of that money that no you'll be able to re-contribute next year. You might think for example by taking that money out before 31 December because that contribution room will regenerate in January as opposed to taking the funds out in January and then needing to wait the full 12 calendar months in order to re-contribute again.
So it's not too late to do something to put us in a better position.
But really, we want to be thinking about any of these tax strategies all year long as opposed to just the last week of the year.
>> When I saw this email and, you mentioning about this, this is a strategy to deploy for the past couple of months, it took me back to first-year university.
You have an essay due the next day.
It's midnight and you say "I'm going to read the book " you don't sleep, you get it in on the wire and you play a tricky game.
>> We don't want to be doing all nighters for tax planning.
The accountants can do that.
We need to think long term about our strategies.
If were making contributions, for example of the year, maybe a contribution to our RRSP, we do have the option to either use that RRSP contribution against this year, 2023 Zen, or next year's income, 2024.
So there is some flexibility there.
But with any of these things, we want to be thinking "what can I do now to put me to better position six months, a year, 10 years from now"?
And there's the thing about the best time to plant a tree, so similarly it's going to apply the tax planning.
The best time to do it is all year long.
The second best time to do it is as soon as you can.
>> The great thing about a new year right?
On top of resolutions, you might've said "okay left it too late for this year and didn't execute it this year perhaps the way I wanted to" and the clock and calendar will turn over and you start getting your ACT!
together for 2024.
> We reset. We start again and maybe that's something you can use the time over the holidays to be thinking about what you struggled with this year in terms of managing your finances and your different strategies.
Is it something that perhaps, you want to start putting in a certain day, month that you review these things?
Or having conversations with your family members about, this is a time when families are all together in the same room.
You might've the opportunity to you, just checking on each other and make sure that everybody is aware of the difference opportunities available.
You might have children, for example, who were turning 18 this year, they might be able to make their first TFS they contribution.
That might be a very nice holiday gift for somebody.
So working together as a family, using this opportunity to really think through what the behavioural changes you might want to make and then meet new year… It's an opportunity to reset.
We have new contribution room in our RRSPs, new contribution room in our to FSA's and FH essays in our ISPs, there is a lot that we can do in the new year.
Yeah.
Taking it as a new opportunity for a fresh start.
>> Great start to the program.
We will get your questions about taxes and estate planning with Nicole Ewing in just a moment time.
A reminder of course that you can get in touch with us any time by emailing MoneyTalkLive@td.
com or filling out the viewer response box under the video player and WebBroker.
Now let's get you update on some of the top stories.
And take a look at how the markets are trading. Shares of BlackBerry are under pressure today. The Waterloo Ontario-based company is lowering its sales forecast for its cybersecurity business as deals are delayed or downsized.
BlackBerry is also working its way through a major restructuring. BlackBerry sales down 13 1/2%. Shares of micron, are on the higher move. The semiconductor company expects demand for memory chips to recover in 2024 following an industrywide slump this year.
Micron is forecasting a revenue of $5.3 billion for the second quarter that's are stronger than analyst expectations. Up about 7% today in shares. Credible cruises handing in an earnings beat as strong demand and higher ticket prices boosted from the bottom line.
The cruise ship operator says Black Friday and cyber Monday bookings hit an all-time high.
Pretty good year for Carnival Cruise Lines are all with stocks up about 8% in today's session. A quick check in on the market, starting on Bay Street with the TSX Composite Index, a little bit of the swoon yesterday afternoon, regaining some of that ground now of more than 109 points on the board. About 1/2 a percent and south of the border, the S&P 500, the same thing, the best expedition I've seen for the activity into the close yesterday when we saw some selling pressures, a bit of profiting after the very nice red we've had, clearly from the start for about the end of October up until present day, 4715, about 30% or will be generous and call that 17 points. We are back now with Nicole Ewing from TD while taking your questions about tax and estate planning.
Let's get to them Nicole.
(Greg reads the question) >> This is a very good question. We think about firstly, the principal residence exception essentially applies to allow you to not pay any tax on the gain of the home that you use as your principal residence. The key there being it is your principal residence. Now, if you're going to change the use of the property, turn it into an income producing property, that might result in a partial deemed disposition of some of the property.
So I'll give you an example when you think about this.
My home, say it's where the hundred thousand dollars.
And I'm going to convert the basement into a rental property. With the CRA's going to look at is "did I make any changes rather did I make any changes so that it is a self-contained unit.
As long as I'm not claiming capital cost allowance on it" and if the rental is really with a call ancillary to the use of my property as a whole so it's not the primary purpose of the residence. If I meet those qualifications, I might not need to, it might not be treated as a change of use.
So if I have my adult child, for example, staying in the basement, that's not necessarily going to be considered a disposition or a change of use of the property but if I do some construction and that property and create a separate entrance and may be put in a kitchen, that will be treated as a change of property. So what happens then, you are deemed to be disposed of a portion of the property and that's going to be essentially determined by your square footage and how much of the property is being used for a different purpose now and you will be deemed to reacquire it at the same cost.
So we will not up to pay tax immediately because we have our principal residence exemption that we can use against that deemed disposition but going forward, that portion of the property that is now being used for rental income is not going to get the benefit of the principal residence exemption. You will still need to report your income and your expenses, you need to do that in either case.
But it will be really based on the facts and a question you ask is if it's the square footage or the amount that's used of the time? Up about what's interesting about the principal residence exception, the rates calculated, it's essentially a number of years +1. So that "plus one" gives, in case you're owning two properties at the same time, it allows people to be able to use the principal residence exemption and use it for the new property as well.
So the math might look a little bit funny.
You will need to, going forward, track the portion of the property that is been changed from its primary use as a principal residence to a use as a rental or essentially a business property.
>> That's fascinating.
>> A lot of what if's.
>> That was a beautiful explanation, nice and clear.
But if you're still unclear, maybe get some advice. I think renting at a whole house just for the Summer, it seems there are so many different ways you could have here.
>> There are and I would recommend, this is the case right think the information that the Canadian revenue agency puts out in the government puts out might be helpful for people because they do put out these information circulars or these technical pieces and you could essentially just what it into your search engine, Prince principal residence exemption in Canada and it will pop up of the government sites there. And they have very I would say technical, but not difficult to read explanations of all the different factors and you could probably find your scenario in there. And see what the, how the government would treat that. So there are a number of examples that they give and they show what the tax treatment would be, based on the various that's a fact but I think sometimes it's useful just to go right to that source and say "okay what is it that I need to keep in mind when I'm doing this?" And then yes, Greg, of course getting that professional tax advice would certainly be recommended.
>> Interesting stuff. Another question now from the audience, [Greg reads the question]that's why I'm glad you answer these questions and not mean a call.
>> ^[laughing]if for example I make a contribution to my spouses RSV, if that money does not stay in the account for that year and an additional two years, then can, if that money is pulled out, it will be taxed back to me.
So I, as the contributor, the amount they take out, up to my contribution, will be taxed in my hands as income for that year.
So it's only going to be the amount that I contributed that's going to be subject to, that I'm going to be responsible for the tax on if there is more withdrawn above and beyond the amount that I contributed within that three years.
Then my spouse will be responsible for the tax on that portion.
> Okay.
Clarity 11.
Another question here, this one about people perhaps holding US stocks. Can they be sold for tax loss selling purposes?
>> I really love this question because it seems like a simple answer but there's always that "but". Yes I US stop can be sold for tax selling but to the extent you have a loss in the value of that stock. Then you can use it to offset gains.
But what we need to keep in mind is the currency exchange rates are really going to be relevant here.
So what might what might look like a loss, could actually be again depending on when you purchase that.
So if it's in US dollars, and the exchange rates have fluctuated over the years, you need to look at what your cost was when you purchased it and what it is today in US dollars.
If you converted to Canadian dollars to see whether you actually do have a loss when you add to the security, plus the exchange rate that's going to be applicable.
So really important to keep that in mind. Yes, you can use US stocks for selling but to the extent that you need to convert that currency, you really want to make sure that you're using accurate numbers so that you're not inadvertently accelerating again that was, that you thought might've been a loss.
>> Very interesting. The thing with the currency aspects of that as well.
As I was at home make sure you do your own research before making any investment decisions.
We'll get back to your questions with Nicole Ewing on taxes and estate planning in just moments time.
I'm a reminder of course you can get in touch with us any time by emailing MoneyTalkLive@td.com.
Now it's get to our educational segment of the day.
If you're looking for information on dividends, WebBroker has tools which can help. Bryan Rogers, Senior Client Education Instructor at TD Direct Investing has more.
>> Today I wanted to take our viewers through how to find certain dividend information it's really important that you can located WebBroker.
So if you're somebody who's training rather trading and dividend stocks are looking to buy dividend stocks dividend based stocks you want to know some key dates that are vital to find of the platform. So let's jump over to WebBroker and I'll take a quick look for example have TD Bank stock up here already and you can flip any symbol of you're in the top right hand side.
Grab a civil you're interested in and then scroll down on the made page. This is an overview page will show you some key information.
You can see market And revenue.
Were looking her for dividend yield.
Based on the current stock price how much will this yield?
It does move up and down all the time but if you'll get a rough idea.
You can see 4.85% than the annual dividend amount is given as well.
He could see that right here.
It does have a couple of other dates, the ex dividend date in payday, those are really important.
The ex dividend date really denotes that when you're going to be able to sell if you own the stock. You can sell the stock what you want to do it basically after the ex dividend date if you want to keep her still get the next dividend.
So that's what I want to show you a little bit more where you can see what are these upcoming exit dividend dates or what are the past ones and hasn't been posted yet.
You may be able to find it under this events section.
So if I click on the "events", this is where we have a number of different events.
The one you're looking at right now is dividends.
I click on that and now you can see if that this is the day that the dividend most recent dividend was announced.
This one authority happened for TD. We can see if there is a dividend per share amount of 1/4 which you can see is 1/4 of the annual dividend rate.
There are the ex dividend rates.
If you want to buy early on the stock to get the next dividend in the payments, my apologies, this one actually has the announcement happening.
If it did dividend hasn't happened yet but you can see will happen in January 21 of 2024.
If you want to receive this next dividend.
You have to buy the stock if you don't own it already.
Euros by the stock prior to this exit dividend to date.
So the January 9 and make sure you buy that for the ninth.
You have to do it not the day before and if you do all the stock you can just have to sell it afterwards if you want to get that next dividend. So a lot of really important information and dates about dividends.
>> Thanks to Bryan Rogers, Senior Client Education Instructor at TD Direct Investing.
Make sure to check out the learning centre on WebBroker for more educational videos, live interactive master classes and upcoming webinars.
Her back with Nicole Ewing digging your questions about tax and estate planning, here's the next one Nicole.
Is there a way to recoup the high tax withheld on US LPs?
Depending on the circumstances you may be able to utilize the foreign tax credit to offset some of that income but otherwise, I'm really not familiar with any ways that we can recoup it. So hopefully the foreign tax credit is available and can be used to offset income. But otherwise, yeah, it's a big tax increase.
>> Assured an street answer to the point.
One here is saying [Gregory's the question] >> This is such a good question and it's hard.
It's a difficult… A difficult decision, really, to make. Because we have to weigh a few factors.
Firstly, obviously you've mentioned one of the benefits is staying in the investments, staying in your registered accounts, allow them to continue to grow in a tax-free environment. But, we need to think about whether we invest what are we invested in? What type of return are we seeing? What type of income are we seeing all those funds?
In a way that against some of the benefits, perhaps of pulling assets down earlier.
So we might want to think about what is your current tax rate? What is your current income? What are you anticipating is going to be in the future? Perhaps when you start receiving your OAS and CCP that the thought is that going to bump you into a different tax bracket?
Perhaps make the OAS clawback applicable that the lot if you have the opportunity to be pulling some of those funds out, as part of that overall strategy, so that you will reduce the mandatory withdrawals from your riff, you might be able to avoid is some of the OAS clawback considerations. Really weighing that against the benefit of keeping it in the account.
You do need to consider again, depending on cash flow needs that if you are taking funds out of your registered accounts, then you will be subject to those withholding tax rules.
And the tax will be withheld and you won't have the opportunity really to recoup it until you are filing your taxes at the end of the year or so we know exactly how much taxes applicable on those amounts.
Needing to take out more in order to account for the withholding tax might be a factor that you need to be thinking about as well.
You might be able to, we talked with the benefits of the tax sheltering, if you have available room in your other nonregistered accounts, such as your registered accounts, like your TFS a, perhaps you're going to be pulling some money out while you have this loan income low tax rate… Putting it into your TFS say, it can continue to grow tax-free there. So you know, I would suggest that we would really want to be doing a retirement planning exercise were looking at a cash flow or income, our income needs, what we expect will change over the next number of years and then make our decisions about whether or not we are pulling down from our RRSPs or ^...¸early based on what our goals are and will really try to achieve.
>> Okay. Nice full answer is there. Let's get to the next one for Nicole. Our CDR's, Canadian depository receipts subject to US dividend withholding tax affair held in a TFS say?
> Yes.
Yes.
So these are treated the same way that any other US dividend or foreign dividend would be treated and in a TFS say, they don't get the benefit of treaty exemption from that. So foreign dividends are subject to withholding tax if they are held in your TFS say.
As CDR's.
So you need to keep that in mind.
>> Okay back to your questions with Nicole Ewing on tax and estate planning in just a moment's time. As always make sure you do your own research before making any investment decisions and a reminder you can get in touch with us at any time.
Do you have a question about investing, or what is driving the markets? Our guests are eager to answer your questions so send them to us here at MoneyTalk Live. You can send your questions two ways: you can send us an email any time at moneytalklive@td.com or you can use the question box at the bottom screen right here on WebBroker just type your question and hit "send". We will see if one of our guests can get you the answer right here at MoneyTalk Live!
>> Canadian consumers seem to be in a festive spirit this holiday season despite inflationary pressures, the numbers after inflation posting its highest reading since December of last year. Anthony Okolie joins is now a TD Economics take on these numbers in the Outlook going forward. What are we seeing here that he?
>> A pretty strong month. Retail sales were up month over month in October. That was slightly lower versus stats Canada flash estimate of 0.8%. We did see the September print revised about a percentage point again, we adjust for inflation.
Solid volumes of 1.4%, the highest in nearly one year.
The flash estimate for November I suggest that sales are relatively unchanged based on the responses from roughly half of the retail survey. When you break down by sector, you saw gains pretty broad-based with sales up in seven out of the nine is subsectors with the biggest increases led by sales in motor vehicle and parts dealers up .5% in real terms. Which continued to recover from the declines we seen over the last two months of the Summer. Now, the sector gains are driven by higher sales at new car dealers. The new car market has remained fairly hot.
We've seen improved vehicle availability. It's made a real impact on the market, it's again, easing pent up demand and outweighing pressures of high interest rates and a slowing economy.
Offsetting some of those gains, softer sales the pump and fuel retailers, when you look at October course sales that excludes gas and sales and car dealerships.
Up 1.2% but in real terms up 1.7%. Again, when we look at the key implications I think the data suggest that Canadian consumers are in a pretty good mood this holiday season again with several categories benefiting from the broad-based spending we saw, food and beverage retailers up, furniture, electronics were also strong, clothing retailers struggling with excess demand, they were also strong in October as well. This again, despite the fact that households are feeling the mounting financial stress and consumers continue to watch their budgets more closely than ever. Retailers of course we are bracing for a drop in holiday spending this year.
Some to prepare to offer deep discounts and shoppers looking for a deal.
But the news is not all bad as I mentioned.
Looking ahead, TD Economics says that auto sales are tracking stronger at their own card spending pointed to a higher reading in November.
Greg?
> Interesting stuff. A bit of resiliency there. There has been a thought though that everything is sort of building against the consumers to the point where they are finding, tightening of the wallets and saying "no more?
What is it heading into 2024?
>> I think more people will likely be typing their wallets and TD Economics expects personal consumption expenditure to grow by a solid 1.5% annualized in the fourth quarter but you can see the numbers, while we've seen improved spending patterns during the holiday season, which has had a high note, it's uncertain that this will continue into the new year.
TD Economics is forecasting the consumer spending particularly durable goods, will be decelerating in the first half of 2024.
Greg?
>> Interesting stuff. Thanks Anthony.
>> My pleasure.
>> MoneyTalk's Anthony Okolie. No for an update number markets.
>> We are having a look at td's advanced dashboard. A platform designed for active traders through TD Direct Investing. This is the heat map function and gives us a view of the market movers.
Let's start with the TSX 60 with price and volume.
Therefore that's how much real estate you occupy on the screen. Financials are getting a fairly healthy bit today a nice block of green on the screen for the biggest banks in the country and also Manulife up a little shy of a percent.
A bit of a mixed picture in the energy space.
You do have crude prices settling today after making some gains in recent sessions based on concerns about global shipping routes and perhaps some pressures there. You have a trap up about a percent, Suncor and should Ovis just down modestly. So nothing too dramatic happening there.
Some of the miners getting a bit today as well. Now, south of the border, as the stocks recover from a bit of a swoon they had yesterday afternoon, everything was just sort of going on pretty modestly to the upside and then a bit of a fall but the most convincing explanation I've seen is simply after the very strong run that we've seen in stocks and pretty broad-based rally in the markets from near the it of October into present day.
Just a bit of profiting. So now you've got some green of the screen on the headline.
Individual names, technology basket, to name like AMD, the chipmaker up almost 3%, Tesla is getting a bit of it today along with some of the more traditional automakers to like Ford and General Motors.
You get more information on TD advanced dashboard by visiting td.com/events dashboard.
We are back with Dick Nicole Ewing from TD Wealth talking tax and estate planning and taking personal finance questions. Let's get back to them.
What is the best way to call to deplete your RRSP, both US and Canadian?
Thank you.
>> Okay.
Well.
Again, going to look at this in the context of our overall strategy.
Thinking about just from a US dollar and Canadian dollar perspective, again, we have to be factoring in currency, it will be converted to convict to Canadian when you're withdrawing it from your RRSP. I wonder whether the question is specifically to the dollar or whether there might be somebody with the US connection as well? For US purposes, amounts or contributed to an RRSP, you do have the option of deferring income throughout, for US tax purposes.
It's under the treaty you are able to do that.
If you do that and you pull money out for Canadian purposes, you will have that, it will be pulled out of the same year for Canadian and US purposes. Which is good. It's what we want. Because that will allow us to use the foreign tax credit to offset taxes paid in Canada against what the US is asking for so were not subject to our double taxation. If however, you have a US tax filing obligation and you have not used the treaty ability to defer the realization of any income within the account, then you're going to be in a bit of a funky situation where you have both income and US income for US purposes what you don't have it for Canadian purposes and vice versa which mightn't then mean that you don't have the ability to offset an you might well be in a situation of double tax.
So if you are a US person who has an RRSP, make sure that your factoring in all these cross-border considerations and getting taxed advice from a cross-border expert. It's a pre-complex calculation to be working through. From a strictly dollar figure, dollar account whether it's US or Canadian, I think the same considerations would apply as would apply if it were strictly Canada, plus. We have the US currency questions whether you're drawing from their first or Canadian account is : it depends on what you think the markets are to be doing.
>> All right important considerations.
There. Another question, would you pay down the mortgage or invest in a tax-free savings account? I hear the platform we can give direct advice in terms of an tax investment so we can deftly run down these scenarios nic and circumstances of the individual both in terms of what investment you you currently have and what income you're earning, what stage are not, whether you are early in the mortgage process or wanting to pay it off.
This, the sorts of things you want to think about are not just really financial. So of course were to be looking at mortgage rates. Whether or not you are renewing during a high interest., Whether or not you're investing in a way that you would be earning more income after tax perspective than you would be losing on the interest that you're paying on your mortgage. So with some math calculation there. But there's also that behavioural issue. Right? When it comes to debt.
Particularly as we see things change in the last couple years, for a lot of people, paying down the mortgage is a, the value is more than just the financial dollar signs. There is something about the security of having paid it down, but being debt-free, that for some people, will be more important than potentially losing out on a higher return that they could have earned in their TFS say. So it's a very personal decision based on your own circumstances. But I would be thinking in this situation, how about you know, do you have the opportunity to make those bigger payments that are going to allow you to pay down that principle so that you are not simply just paying off the interest on your mortgage. Certain mortgages, however, they are structured, might give you a real bang for your buck if you're able to make those additional payments.
And again, in your TFS say, if you know that your to meeting these funds to get, for example, for an emergency, if you don't have an emergency fund, I would be considering directing some money to that as well.
So it would be an overall question of your own personal circumstances.
And what type of investments are currently in but frankly neither of those is a bad thing. Paying down our mortgage and investing in TFS a, not necessarily one of the other, perhaps you have an opportunity to do a little bit of both but both of those will be say directionally correct in putting yourself in a better financial position by using the income that you have, using the funds that you have the most effective way as opposed to having it disappear as it could happen over the holidays and were not keeping an eye on things.
>> I like that term "directionally correct" we run out of time to call but before let's go I want to circle back around the top, the year is almost over, obviously you were saying if there was something there were things you wanted to achieve for the year you have to think of the prior months. But the calendar floats in 2024.
We can all be Hugh Jackman getting ready for Wolverine.
If he's older than me, he can do it, maybe I can do it in 2024.
> It's so important to get financial support and I would say even more important in future years is to really anticipate that tax filing date is going to be coming and be in a position to actually make your payments by the date that they are due because not only will you have a late filing penalty, a 5%, you will have an additional interest on the unpaid amounts and going into 2024, we are seeing a 10% charge on overdue charge for tax purposes so that's quite substantial, making sure that your prioritizing and getting any taxes that you oh, being in a position to pay those on the due date will really help as well. So we want to be you know, not thinking about the importance of having those is 10% is a.
Big hit. Especially thinking, I think it was 5% of the first quarter of 2022 or maybe even a second quarter.
But in any event, it's a pretty big number. So yes, financial house in order. Let's make sure that we have anticipating what our needs are going to be through the year and plan appropriately.
>> Nicole, always a pleasure having on the program.
We always learned so much. Thanks for your contributions this year and I look forward to many more conversations in 2024.
> You too, you two thanks.
>> Nicole Ewing, Director of Tax and Estate Planning with TD Wealth. As always make sure you do your own research before making investment decisions.
On a programming note, this is actually our last show 2023. We will be on a holiday break and we will be back on Monday, January 8 with Bart Melek joining us, global Head of Commodities Strategy with TD Securities taking your questions about commodities. You can think about your questions ahead of time and email them at moneytalklive@td.com.
We want to give argue our viewers a big thank you for watching and we see them all here behind us lined up with the group shot that we did.
It takes a lot of people to put two guys in front of a camera and I guested to talk to you for 45 minutes every day. We Hope you enjoy the programming is much as we've enjoyed putting it on for you and that you have found it insightful. So on behalf of me and Anthony here on the desk, everyone on the team, we Hope to see you all again in 2024 when we return. Thanks for watching this year.
>> Happy holidays everyone in seasons greetings thanks for watching!
[Music]
Every day I'll be joined by guests from across TD, many of whom you'll only see here.
We we'll take you through it's moving the markets and answer your questions about investing.
Coming up on today's show we will discuss what you should be thinking about when it comes to your personal finances as we approach a new year with TD Wealth Nicole Ewing who will join us.
MoneyTalk's Anthony Okolie will look at Canada's latest retail sales report and what it says about the health of the consumer.
And in today's WebBroker education segment, Bryan Rogers will show us how to find it dividend information on WebBroker.
So here's how you can get in touch with us: just email us at moneytalklive@td.com or fill out the viewer response box under the viewer player here in the platform. Let's get you an update on the markets, will start here at home on Bay Street with the TSX Composite Index. We have some green on the screen. Up a fairly healthy 154 points, about three quarters of a percent.
We have the price of gold moving higher today, crude having just made some sizable gains over the past couple of sessions then that swoon in the afternoon session yesterday, Wall Street and Bay Street seemed to be recovering from nicely. Air Canada is one of the movers today to the upside, let's check in on the big airline.
18, setting on Europe a little shy 3%. BlackBerry however, latest earnings in the street now making rather not making what they saw either.
More about their path going forward as well, down about 13% for BlackBerry shares at this hour.
South of the border, you did have that swoon in the afternoon, the best explanation I'm seeing as it's been a pretty good run as you can see from near the end of October into recent days, perhaps a little profit-taking yesterday afternoon. We seem to be back in a buying mood although you have to assume that volumes, transactions, starting to get a little thinner out there as we had closer and closer to the holiday week. 31 points on the board though, you're up about two thirds of a percent. The tech heavy NASDAQ, what's happening in that space against the broader market, up almost a full percent of the hundred and 34 points in the table and micron, one of those tech names moving to the upside today, they like the forecast and the company itself is saying they think they're starting to see signs there will be a rebound in demand for the memory chips so important their business next year.
You have micron up 7 1/3%.
And that's your market update.
As a new year quickly approaches, you may want to carve out some time over the holiday season to consider how your financial house could get an order for 2024.
Joining us now to discuss more is Nicole Ewing, Director of Tax and Estate Planning at TD Wealth.
Nicole, great to see you as always. Grass >> To be her Greg.
>> We have a bit of a crunch over the next couple of days but hopefully people have some downtime over the break heading into 2024.
What we need to be keeping in mind?
>> Well we've got some great news heading into 2024 in terms of the TFS they limit being increased. So that will go up to $7000 and it will also allow any contributions taken out and regenerated. You'll have the opportunity to re-contribute those funds as well.
So we are looking at total contribution with starting in 2009. Eligible the whole time you will land on $95,000 of contribution room to be able to continue to earn funds in the account tax-free and take them out tax-free.
So that's good news, I think, an extra $7000 of tax-free contributions is certainly good.
>> Very positive heading into 2024. Thinking about that as part of a strategy for building wealth over time at estate planning. What about, you and I've talked with this several times throughout the fall. The change to the alternative minimum tax. What people need to be aware of on this front as we get closer and closer to 2024?
>> That's one of the few changes coming in 2024.
So the alternative minimum tax, just to make sure everyone is aware, is essentially a parallel tax calculation that is done right alongside the normal tax calculation that you would do. And what's changing next year is the way that the calculation is going to be determined. So the credits that would be included, the deductions that would be included, the exemption amounts, those are all changing quite a bit and depending on your personal circumstances, if you're somebody who earns a significant income, passive income… Capital gains… Or if you make significant contributions to charity, you might be caught by these rules.
And we've also seen the increase in the exemption amount go up from 40,000 to 173,000. So quite substantial. But that doesn't apply to trusts so if you're earning income in a family trust, you really want to make sure that you look in to see how that calculation might be impacting you, perhaps there are ways to do quick withdrawals, while you're still in 2023. But just to be aware of some of those changing the rules. As with anything, we want to be thinking about that sort of strategy in terms of your overall strategy.
So how is that impacting your, your RRSP contributions, your TFS they contributions, do you have the opportunity to, perhaps, earn income in a different way?
With the change of the AMT rules, one of the big changes is the ability to carry forward some of your losses and for the purpose of that calculation, so you want to make sure that your factoring into your overall cash flow and savings and investment strategies.
>> There are some interesting things there to keep in mind. I got an email in my WebBroker inbox this morning reminding me that if you want to sell security, to realize the capital gain or loss for tax purposes, your time is running out. I mean we are not even talking about a matter of weeks.
Were talking about days. Very close to those limits.
>> I'm very reluctant at this point to be talking about year-end tax planning because to be frank, this is the year end. It will take some time for those Securities and those trades to be processed and so now is really not the time to be making panicky decisions.
We want to be making our tax strategy really, throughout the year.
In looking at things, October, November, if we need to do any of our year end strategies, but there are certain things you could do.
So for example, you might want to… If you're planning to buy a home next year, and you qualify for the first home savings account, you might want to hurry up and open that account. Now.
That would give you carryforward room into 2024 so will allow you to make two contributions of $8000 and that way you've doubled the amount that you can utilize towards that home.
So there are some last-minute things, the same with charitable donations.
If you're doing a direct gift, you still have time until December 31. But, if you're thinking of doing it was really effective giving strategies, like donating publicly traded Securities that have an accrued gain, that deadline is now. Because there will be a little bit of a delay in getting some of those things processed and over to the charities and time.
But it is too late, I would say, for some of the strategies that may take a little bit longer to implement.
But we still do have the opportunity to do some last-minute things. Again, we talked about the TFS a, if you're planning on using some of that money that no you'll be able to re-contribute next year. You might think for example by taking that money out before 31 December because that contribution room will regenerate in January as opposed to taking the funds out in January and then needing to wait the full 12 calendar months in order to re-contribute again.
So it's not too late to do something to put us in a better position.
But really, we want to be thinking about any of these tax strategies all year long as opposed to just the last week of the year.
>> When I saw this email and, you mentioning about this, this is a strategy to deploy for the past couple of months, it took me back to first-year university.
You have an essay due the next day.
It's midnight and you say "I'm going to read the book " you don't sleep, you get it in on the wire and you play a tricky game.
>> We don't want to be doing all nighters for tax planning.
The accountants can do that.
We need to think long term about our strategies.
If were making contributions, for example of the year, maybe a contribution to our RRSP, we do have the option to either use that RRSP contribution against this year, 2023 Zen, or next year's income, 2024.
So there is some flexibility there.
But with any of these things, we want to be thinking "what can I do now to put me to better position six months, a year, 10 years from now"?
And there's the thing about the best time to plant a tree, so similarly it's going to apply the tax planning.
The best time to do it is all year long.
The second best time to do it is as soon as you can.
>> The great thing about a new year right?
On top of resolutions, you might've said "okay left it too late for this year and didn't execute it this year perhaps the way I wanted to" and the clock and calendar will turn over and you start getting your ACT!
together for 2024.
> We reset. We start again and maybe that's something you can use the time over the holidays to be thinking about what you struggled with this year in terms of managing your finances and your different strategies.
Is it something that perhaps, you want to start putting in a certain day, month that you review these things?
Or having conversations with your family members about, this is a time when families are all together in the same room.
You might've the opportunity to you, just checking on each other and make sure that everybody is aware of the difference opportunities available.
You might have children, for example, who were turning 18 this year, they might be able to make their first TFS they contribution.
That might be a very nice holiday gift for somebody.
So working together as a family, using this opportunity to really think through what the behavioural changes you might want to make and then meet new year… It's an opportunity to reset.
We have new contribution room in our RRSPs, new contribution room in our to FSA's and FH essays in our ISPs, there is a lot that we can do in the new year.
Yeah.
Taking it as a new opportunity for a fresh start.
>> Great start to the program.
We will get your questions about taxes and estate planning with Nicole Ewing in just a moment time.
A reminder of course that you can get in touch with us any time by emailing MoneyTalkLive@td.
com or filling out the viewer response box under the video player and WebBroker.
Now let's get you update on some of the top stories.
And take a look at how the markets are trading. Shares of BlackBerry are under pressure today. The Waterloo Ontario-based company is lowering its sales forecast for its cybersecurity business as deals are delayed or downsized.
BlackBerry is also working its way through a major restructuring. BlackBerry sales down 13 1/2%. Shares of micron, are on the higher move. The semiconductor company expects demand for memory chips to recover in 2024 following an industrywide slump this year.
Micron is forecasting a revenue of $5.3 billion for the second quarter that's are stronger than analyst expectations. Up about 7% today in shares. Credible cruises handing in an earnings beat as strong demand and higher ticket prices boosted from the bottom line.
The cruise ship operator says Black Friday and cyber Monday bookings hit an all-time high.
Pretty good year for Carnival Cruise Lines are all with stocks up about 8% in today's session. A quick check in on the market, starting on Bay Street with the TSX Composite Index, a little bit of the swoon yesterday afternoon, regaining some of that ground now of more than 109 points on the board. About 1/2 a percent and south of the border, the S&P 500, the same thing, the best expedition I've seen for the activity into the close yesterday when we saw some selling pressures, a bit of profiting after the very nice red we've had, clearly from the start for about the end of October up until present day, 4715, about 30% or will be generous and call that 17 points. We are back now with Nicole Ewing from TD while taking your questions about tax and estate planning.
Let's get to them Nicole.
(Greg reads the question) >> This is a very good question. We think about firstly, the principal residence exception essentially applies to allow you to not pay any tax on the gain of the home that you use as your principal residence. The key there being it is your principal residence. Now, if you're going to change the use of the property, turn it into an income producing property, that might result in a partial deemed disposition of some of the property.
So I'll give you an example when you think about this.
My home, say it's where the hundred thousand dollars.
And I'm going to convert the basement into a rental property. With the CRA's going to look at is "did I make any changes rather did I make any changes so that it is a self-contained unit.
As long as I'm not claiming capital cost allowance on it" and if the rental is really with a call ancillary to the use of my property as a whole so it's not the primary purpose of the residence. If I meet those qualifications, I might not need to, it might not be treated as a change of use.
So if I have my adult child, for example, staying in the basement, that's not necessarily going to be considered a disposition or a change of use of the property but if I do some construction and that property and create a separate entrance and may be put in a kitchen, that will be treated as a change of property. So what happens then, you are deemed to be disposed of a portion of the property and that's going to be essentially determined by your square footage and how much of the property is being used for a different purpose now and you will be deemed to reacquire it at the same cost.
So we will not up to pay tax immediately because we have our principal residence exemption that we can use against that deemed disposition but going forward, that portion of the property that is now being used for rental income is not going to get the benefit of the principal residence exemption. You will still need to report your income and your expenses, you need to do that in either case.
But it will be really based on the facts and a question you ask is if it's the square footage or the amount that's used of the time? Up about what's interesting about the principal residence exception, the rates calculated, it's essentially a number of years +1. So that "plus one" gives, in case you're owning two properties at the same time, it allows people to be able to use the principal residence exemption and use it for the new property as well.
So the math might look a little bit funny.
You will need to, going forward, track the portion of the property that is been changed from its primary use as a principal residence to a use as a rental or essentially a business property.
>> That's fascinating.
>> A lot of what if's.
>> That was a beautiful explanation, nice and clear.
But if you're still unclear, maybe get some advice. I think renting at a whole house just for the Summer, it seems there are so many different ways you could have here.
>> There are and I would recommend, this is the case right think the information that the Canadian revenue agency puts out in the government puts out might be helpful for people because they do put out these information circulars or these technical pieces and you could essentially just what it into your search engine, Prince principal residence exemption in Canada and it will pop up of the government sites there. And they have very I would say technical, but not difficult to read explanations of all the different factors and you could probably find your scenario in there. And see what the, how the government would treat that. So there are a number of examples that they give and they show what the tax treatment would be, based on the various that's a fact but I think sometimes it's useful just to go right to that source and say "okay what is it that I need to keep in mind when I'm doing this?" And then yes, Greg, of course getting that professional tax advice would certainly be recommended.
>> Interesting stuff. Another question now from the audience, [Greg reads the question]that's why I'm glad you answer these questions and not mean a call.
>> ^[laughing]if for example I make a contribution to my spouses RSV, if that money does not stay in the account for that year and an additional two years, then can, if that money is pulled out, it will be taxed back to me.
So I, as the contributor, the amount they take out, up to my contribution, will be taxed in my hands as income for that year.
So it's only going to be the amount that I contributed that's going to be subject to, that I'm going to be responsible for the tax on if there is more withdrawn above and beyond the amount that I contributed within that three years.
Then my spouse will be responsible for the tax on that portion.
> Okay.
Clarity 11.
Another question here, this one about people perhaps holding US stocks. Can they be sold for tax loss selling purposes?
>> I really love this question because it seems like a simple answer but there's always that "but". Yes I US stop can be sold for tax selling but to the extent you have a loss in the value of that stock. Then you can use it to offset gains.
But what we need to keep in mind is the currency exchange rates are really going to be relevant here.
So what might what might look like a loss, could actually be again depending on when you purchase that.
So if it's in US dollars, and the exchange rates have fluctuated over the years, you need to look at what your cost was when you purchased it and what it is today in US dollars.
If you converted to Canadian dollars to see whether you actually do have a loss when you add to the security, plus the exchange rate that's going to be applicable.
So really important to keep that in mind. Yes, you can use US stocks for selling but to the extent that you need to convert that currency, you really want to make sure that you're using accurate numbers so that you're not inadvertently accelerating again that was, that you thought might've been a loss.
>> Very interesting. The thing with the currency aspects of that as well.
As I was at home make sure you do your own research before making any investment decisions.
We'll get back to your questions with Nicole Ewing on taxes and estate planning in just moments time.
I'm a reminder of course you can get in touch with us any time by emailing MoneyTalkLive@td.com.
Now it's get to our educational segment of the day.
If you're looking for information on dividends, WebBroker has tools which can help. Bryan Rogers, Senior Client Education Instructor at TD Direct Investing has more.
>> Today I wanted to take our viewers through how to find certain dividend information it's really important that you can located WebBroker.
So if you're somebody who's training rather trading and dividend stocks are looking to buy dividend stocks dividend based stocks you want to know some key dates that are vital to find of the platform. So let's jump over to WebBroker and I'll take a quick look for example have TD Bank stock up here already and you can flip any symbol of you're in the top right hand side.
Grab a civil you're interested in and then scroll down on the made page. This is an overview page will show you some key information.
You can see market And revenue.
Were looking her for dividend yield.
Based on the current stock price how much will this yield?
It does move up and down all the time but if you'll get a rough idea.
You can see 4.85% than the annual dividend amount is given as well.
He could see that right here.
It does have a couple of other dates, the ex dividend date in payday, those are really important.
The ex dividend date really denotes that when you're going to be able to sell if you own the stock. You can sell the stock what you want to do it basically after the ex dividend date if you want to keep her still get the next dividend.
So that's what I want to show you a little bit more where you can see what are these upcoming exit dividend dates or what are the past ones and hasn't been posted yet.
You may be able to find it under this events section.
So if I click on the "events", this is where we have a number of different events.
The one you're looking at right now is dividends.
I click on that and now you can see if that this is the day that the dividend most recent dividend was announced.
This one authority happened for TD. We can see if there is a dividend per share amount of 1/4 which you can see is 1/4 of the annual dividend rate.
There are the ex dividend rates.
If you want to buy early on the stock to get the next dividend in the payments, my apologies, this one actually has the announcement happening.
If it did dividend hasn't happened yet but you can see will happen in January 21 of 2024.
If you want to receive this next dividend.
You have to buy the stock if you don't own it already.
Euros by the stock prior to this exit dividend to date.
So the January 9 and make sure you buy that for the ninth.
You have to do it not the day before and if you do all the stock you can just have to sell it afterwards if you want to get that next dividend. So a lot of really important information and dates about dividends.
>> Thanks to Bryan Rogers, Senior Client Education Instructor at TD Direct Investing.
Make sure to check out the learning centre on WebBroker for more educational videos, live interactive master classes and upcoming webinars.
Her back with Nicole Ewing digging your questions about tax and estate planning, here's the next one Nicole.
Is there a way to recoup the high tax withheld on US LPs?
Depending on the circumstances you may be able to utilize the foreign tax credit to offset some of that income but otherwise, I'm really not familiar with any ways that we can recoup it. So hopefully the foreign tax credit is available and can be used to offset income. But otherwise, yeah, it's a big tax increase.
>> Assured an street answer to the point.
One here is saying [Gregory's the question] >> This is such a good question and it's hard.
It's a difficult… A difficult decision, really, to make. Because we have to weigh a few factors.
Firstly, obviously you've mentioned one of the benefits is staying in the investments, staying in your registered accounts, allow them to continue to grow in a tax-free environment. But, we need to think about whether we invest what are we invested in? What type of return are we seeing? What type of income are we seeing all those funds?
In a way that against some of the benefits, perhaps of pulling assets down earlier.
So we might want to think about what is your current tax rate? What is your current income? What are you anticipating is going to be in the future? Perhaps when you start receiving your OAS and CCP that the thought is that going to bump you into a different tax bracket?
Perhaps make the OAS clawback applicable that the lot if you have the opportunity to be pulling some of those funds out, as part of that overall strategy, so that you will reduce the mandatory withdrawals from your riff, you might be able to avoid is some of the OAS clawback considerations. Really weighing that against the benefit of keeping it in the account.
You do need to consider again, depending on cash flow needs that if you are taking funds out of your registered accounts, then you will be subject to those withholding tax rules.
And the tax will be withheld and you won't have the opportunity really to recoup it until you are filing your taxes at the end of the year or so we know exactly how much taxes applicable on those amounts.
Needing to take out more in order to account for the withholding tax might be a factor that you need to be thinking about as well.
You might be able to, we talked with the benefits of the tax sheltering, if you have available room in your other nonregistered accounts, such as your registered accounts, like your TFS a, perhaps you're going to be pulling some money out while you have this loan income low tax rate… Putting it into your TFS say, it can continue to grow tax-free there. So you know, I would suggest that we would really want to be doing a retirement planning exercise were looking at a cash flow or income, our income needs, what we expect will change over the next number of years and then make our decisions about whether or not we are pulling down from our RRSPs or ^...¸early based on what our goals are and will really try to achieve.
>> Okay. Nice full answer is there. Let's get to the next one for Nicole. Our CDR's, Canadian depository receipts subject to US dividend withholding tax affair held in a TFS say?
> Yes.
Yes.
So these are treated the same way that any other US dividend or foreign dividend would be treated and in a TFS say, they don't get the benefit of treaty exemption from that. So foreign dividends are subject to withholding tax if they are held in your TFS say.
As CDR's.
So you need to keep that in mind.
>> Okay back to your questions with Nicole Ewing on tax and estate planning in just a moment's time. As always make sure you do your own research before making any investment decisions and a reminder you can get in touch with us at any time.
Do you have a question about investing, or what is driving the markets? Our guests are eager to answer your questions so send them to us here at MoneyTalk Live. You can send your questions two ways: you can send us an email any time at moneytalklive@td.com or you can use the question box at the bottom screen right here on WebBroker just type your question and hit "send". We will see if one of our guests can get you the answer right here at MoneyTalk Live!
>> Canadian consumers seem to be in a festive spirit this holiday season despite inflationary pressures, the numbers after inflation posting its highest reading since December of last year. Anthony Okolie joins is now a TD Economics take on these numbers in the Outlook going forward. What are we seeing here that he?
>> A pretty strong month. Retail sales were up month over month in October. That was slightly lower versus stats Canada flash estimate of 0.8%. We did see the September print revised about a percentage point again, we adjust for inflation.
Solid volumes of 1.4%, the highest in nearly one year.
The flash estimate for November I suggest that sales are relatively unchanged based on the responses from roughly half of the retail survey. When you break down by sector, you saw gains pretty broad-based with sales up in seven out of the nine is subsectors with the biggest increases led by sales in motor vehicle and parts dealers up .5% in real terms. Which continued to recover from the declines we seen over the last two months of the Summer. Now, the sector gains are driven by higher sales at new car dealers. The new car market has remained fairly hot.
We've seen improved vehicle availability. It's made a real impact on the market, it's again, easing pent up demand and outweighing pressures of high interest rates and a slowing economy.
Offsetting some of those gains, softer sales the pump and fuel retailers, when you look at October course sales that excludes gas and sales and car dealerships.
Up 1.2% but in real terms up 1.7%. Again, when we look at the key implications I think the data suggest that Canadian consumers are in a pretty good mood this holiday season again with several categories benefiting from the broad-based spending we saw, food and beverage retailers up, furniture, electronics were also strong, clothing retailers struggling with excess demand, they were also strong in October as well. This again, despite the fact that households are feeling the mounting financial stress and consumers continue to watch their budgets more closely than ever. Retailers of course we are bracing for a drop in holiday spending this year.
Some to prepare to offer deep discounts and shoppers looking for a deal.
But the news is not all bad as I mentioned.
Looking ahead, TD Economics says that auto sales are tracking stronger at their own card spending pointed to a higher reading in November.
Greg?
> Interesting stuff. A bit of resiliency there. There has been a thought though that everything is sort of building against the consumers to the point where they are finding, tightening of the wallets and saying "no more?
What is it heading into 2024?
>> I think more people will likely be typing their wallets and TD Economics expects personal consumption expenditure to grow by a solid 1.5% annualized in the fourth quarter but you can see the numbers, while we've seen improved spending patterns during the holiday season, which has had a high note, it's uncertain that this will continue into the new year.
TD Economics is forecasting the consumer spending particularly durable goods, will be decelerating in the first half of 2024.
Greg?
>> Interesting stuff. Thanks Anthony.
>> My pleasure.
>> MoneyTalk's Anthony Okolie. No for an update number markets.
>> We are having a look at td's advanced dashboard. A platform designed for active traders through TD Direct Investing. This is the heat map function and gives us a view of the market movers.
Let's start with the TSX 60 with price and volume.
Therefore that's how much real estate you occupy on the screen. Financials are getting a fairly healthy bit today a nice block of green on the screen for the biggest banks in the country and also Manulife up a little shy of a percent.
A bit of a mixed picture in the energy space.
You do have crude prices settling today after making some gains in recent sessions based on concerns about global shipping routes and perhaps some pressures there. You have a trap up about a percent, Suncor and should Ovis just down modestly. So nothing too dramatic happening there.
Some of the miners getting a bit today as well. Now, south of the border, as the stocks recover from a bit of a swoon they had yesterday afternoon, everything was just sort of going on pretty modestly to the upside and then a bit of a fall but the most convincing explanation I've seen is simply after the very strong run that we've seen in stocks and pretty broad-based rally in the markets from near the it of October into present day.
Just a bit of profiting. So now you've got some green of the screen on the headline.
Individual names, technology basket, to name like AMD, the chipmaker up almost 3%, Tesla is getting a bit of it today along with some of the more traditional automakers to like Ford and General Motors.
You get more information on TD advanced dashboard by visiting td.com/events dashboard.
We are back with Dick Nicole Ewing from TD Wealth talking tax and estate planning and taking personal finance questions. Let's get back to them.
What is the best way to call to deplete your RRSP, both US and Canadian?
Thank you.
>> Okay.
Well.
Again, going to look at this in the context of our overall strategy.
Thinking about just from a US dollar and Canadian dollar perspective, again, we have to be factoring in currency, it will be converted to convict to Canadian when you're withdrawing it from your RRSP. I wonder whether the question is specifically to the dollar or whether there might be somebody with the US connection as well? For US purposes, amounts or contributed to an RRSP, you do have the option of deferring income throughout, for US tax purposes.
It's under the treaty you are able to do that.
If you do that and you pull money out for Canadian purposes, you will have that, it will be pulled out of the same year for Canadian and US purposes. Which is good. It's what we want. Because that will allow us to use the foreign tax credit to offset taxes paid in Canada against what the US is asking for so were not subject to our double taxation. If however, you have a US tax filing obligation and you have not used the treaty ability to defer the realization of any income within the account, then you're going to be in a bit of a funky situation where you have both income and US income for US purposes what you don't have it for Canadian purposes and vice versa which mightn't then mean that you don't have the ability to offset an you might well be in a situation of double tax.
So if you are a US person who has an RRSP, make sure that your factoring in all these cross-border considerations and getting taxed advice from a cross-border expert. It's a pre-complex calculation to be working through. From a strictly dollar figure, dollar account whether it's US or Canadian, I think the same considerations would apply as would apply if it were strictly Canada, plus. We have the US currency questions whether you're drawing from their first or Canadian account is : it depends on what you think the markets are to be doing.
>> All right important considerations.
There. Another question, would you pay down the mortgage or invest in a tax-free savings account? I hear the platform we can give direct advice in terms of an tax investment so we can deftly run down these scenarios nic and circumstances of the individual both in terms of what investment you you currently have and what income you're earning, what stage are not, whether you are early in the mortgage process or wanting to pay it off.
This, the sorts of things you want to think about are not just really financial. So of course were to be looking at mortgage rates. Whether or not you are renewing during a high interest., Whether or not you're investing in a way that you would be earning more income after tax perspective than you would be losing on the interest that you're paying on your mortgage. So with some math calculation there. But there's also that behavioural issue. Right? When it comes to debt.
Particularly as we see things change in the last couple years, for a lot of people, paying down the mortgage is a, the value is more than just the financial dollar signs. There is something about the security of having paid it down, but being debt-free, that for some people, will be more important than potentially losing out on a higher return that they could have earned in their TFS say. So it's a very personal decision based on your own circumstances. But I would be thinking in this situation, how about you know, do you have the opportunity to make those bigger payments that are going to allow you to pay down that principle so that you are not simply just paying off the interest on your mortgage. Certain mortgages, however, they are structured, might give you a real bang for your buck if you're able to make those additional payments.
And again, in your TFS say, if you know that your to meeting these funds to get, for example, for an emergency, if you don't have an emergency fund, I would be considering directing some money to that as well.
So it would be an overall question of your own personal circumstances.
And what type of investments are currently in but frankly neither of those is a bad thing. Paying down our mortgage and investing in TFS a, not necessarily one of the other, perhaps you have an opportunity to do a little bit of both but both of those will be say directionally correct in putting yourself in a better financial position by using the income that you have, using the funds that you have the most effective way as opposed to having it disappear as it could happen over the holidays and were not keeping an eye on things.
>> I like that term "directionally correct" we run out of time to call but before let's go I want to circle back around the top, the year is almost over, obviously you were saying if there was something there were things you wanted to achieve for the year you have to think of the prior months. But the calendar floats in 2024.
We can all be Hugh Jackman getting ready for Wolverine.
If he's older than me, he can do it, maybe I can do it in 2024.
> It's so important to get financial support and I would say even more important in future years is to really anticipate that tax filing date is going to be coming and be in a position to actually make your payments by the date that they are due because not only will you have a late filing penalty, a 5%, you will have an additional interest on the unpaid amounts and going into 2024, we are seeing a 10% charge on overdue charge for tax purposes so that's quite substantial, making sure that your prioritizing and getting any taxes that you oh, being in a position to pay those on the due date will really help as well. So we want to be you know, not thinking about the importance of having those is 10% is a.
Big hit. Especially thinking, I think it was 5% of the first quarter of 2022 or maybe even a second quarter.
But in any event, it's a pretty big number. So yes, financial house in order. Let's make sure that we have anticipating what our needs are going to be through the year and plan appropriately.
>> Nicole, always a pleasure having on the program.
We always learned so much. Thanks for your contributions this year and I look forward to many more conversations in 2024.
> You too, you two thanks.
>> Nicole Ewing, Director of Tax and Estate Planning with TD Wealth. As always make sure you do your own research before making investment decisions.
On a programming note, this is actually our last show 2023. We will be on a holiday break and we will be back on Monday, January 8 with Bart Melek joining us, global Head of Commodities Strategy with TD Securities taking your questions about commodities. You can think about your questions ahead of time and email them at moneytalklive@td.com.
We want to give argue our viewers a big thank you for watching and we see them all here behind us lined up with the group shot that we did.
It takes a lot of people to put two guys in front of a camera and I guested to talk to you for 45 minutes every day. We Hope you enjoy the programming is much as we've enjoyed putting it on for you and that you have found it insightful. So on behalf of me and Anthony here on the desk, everyone on the team, we Hope to see you all again in 2024 when we return. Thanks for watching this year.
>> Happy holidays everyone in seasons greetings thanks for watching!
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