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aside from the basics that rrsp is tax-deferred, and tfsa is after-tax, how would tax work on something like dividend stocks.

the dividend payouts are treated like income, and in an rrsp are tax-deferred, and tfsa are not taxed. does this mean that if i have a dividend stock in my rrsp/tfsa, any payouts are still kept in my rrsp/tfsa. i can then (without removing it from the registered account) reinvest this money. but when i want to withdraw, then i'll be taxed for the rrsp (at retirement, or whenever)/not taxed for the tfsa. (also accounting for a lower tax rate for dividend income)

is this true?

furthermore, for dividend stocks, in addition to the dividends, the stock itself has value. so if i choose to sell off the dividend stocks in an rrsp, would this money just stay in the rrsp shelter, and i could reinvest with it? or would i be taxed on any gains over my original purchase price?

i hope i'm making sense. basically, if a security is in a registered account and generates income, is the income immediately taxable? is sale of the security itself taxable?
 

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TFSA: no taxes to worry about at all for Cdn bonds, dividends and capital gains.

RRSP: there are no taxes until money is withdrawn and then it is taxed as just income. Now since this is the way that fixed income investments are normally taxed anyway, it makes most sense to hold all fixed income in the RRSP. If your investments exceed your RRSP and TFSA, it makes most sense to hold Canadian equities in the non-registered accounts. There is still reason I believe to hold non-Canadian equities in the RRSP due to the non-preferential treatment of taxes on dividends.
 

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Both accounts are tax free from CRA. However US dividends will incur a 15% witholding tax in the TFSA from the IRA. There is a canada/us tax treaty for retirement accounts.
I am not sure about foreign dividends.
FT was going (is going?) To do an article on various countries tax treaties with Canada.
 

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I couldn't find an article written yet on Frugal Traders site. I wanted to read about the witholding tax.

Yes, I understand that if it (a US stock) is held with in your RRSP you are witholding tax exempt.

But as I don't hold any foreign stocks in a tfsa or a non registered account, I don't know how the process works and wanted to know a little more about it.

Any links to articles would be appreciated.

Hmmm...I might have answered my own question....man do I need ot find something better to do on Friday nights.

http://www.canadiancapitalist.com/tax-implications-of-foreign-dividend-investing/

Still haven't found out if I need an US$ account to do this, or if I can simply pay in CDN funds.
 
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