Setting up a US dollar sub-account within my InvestorLine RRSP account was easy. I just had to pick up the phone and speak to an InvestorLine rep. The trickier part was deciding what to hold in the US ledger and how to get it there. As a first step, I decided to test transferring some shares of a stock from the Canadian dollar side of my account to the US dollar side.
Here’s what happened.
Picking a Stock to Move from CAD to USD in my Account
I had some TD shares in my regular InvestorLine account. I had bought them on the TSX using Canadian dollars. They pay me my dividends in Canadian dollars. Since I bought some of them during the recent fire sale, they display a tidy little capital gain in the gains and losses column.
TD is also listed on the stock exchange in New York. If Americans buy it from that exchange, they pay US dollars for their shares. They are paid the quarterly dividend in US dollars. If they sell their holding, they are paid in US dollars.
A stock that is held on two (or more) exchanges like this is sometimes called inter-listed.
But you don’t have to be an American to buy TD shares on the NYSE or to sell them on it. Your self-directed brokerage may let you hold stocks in a US dollar ledger and lets you keep your profits in a US dollar cash account or money market fund. BMO InvestorLine allows this.
So I decided to move some shares of TD from the Canadian side of my account to the US side and watch what happened.
How to Transfer Shares from the Canadian to the US Journal for an InvestorLine Account
At this time (July 2013) to move shares from the Canadian dollar journal for my InvestorLine RRSP to the US dollar journal, I have to phone InvestorLine.
- Call InvestorLine at 1 888 776 6886.
- Provide your InvestorLine account number and your access password.
- Ask the agent to transfer the correct number of shares from your Canadian dollar account to your US dollar account.
Can I Transfer Just Some of My Shares to the US Side of my InvestorLine Account?
Being someone who likes testing things, I requested to transfer only 100 of my TD shares to my US dollar ledger. InvestorLine was quite agreeable and had no problem leaving the rest of the shares in my Canadian dollar ledger.
The agent did warn me, though, that for a day or two I will see the shares listed twice. He cautioned me not to over-estimate my holdings while waiting for the record keeping to straighten out. I assured him I wouldn’t sell shares I don’t have.
Can I Request a Transfer at the Same Time as I Create a US Side to my Account?
Even though I contacted InvestorLine using a toll-free number, and even though there was no wait time (!) to speak to an agent, I still combined my requests into a single call.
So yes, you can request the creation of a US side to your account during the same phone call as you request a transfer of some shares from the Canadian side of your account to the yet-to-be-created US side. How efficient!
What Happened the Business Day After I Requested the Transfer to my New US Dollar Sub-Account
So I made the request to create a US side for my account yesterday, on Thursday.
Today, on Friday, I logged in to my InvestorLine RRSP account to see what had changed. Here’s what I found:
Request made July 11 2013 to transfer 100 shares of TD when I called to create the US ledger.
On the morning of July 12 2013, as warned, I can see two line items in
my Transaction History:
Transaction Date: July 11, 2013
Settlement Date: July 11, 2013
Activity Description: Transfer out
Description: Toronto-Dominion Bank
Symbol: TD
Quantity: -100
Price: blank
Total Amount: 0.00 C
Followed by another line item
Transaction Date: July 11, 2013
Settlement Date: July 11, 2013
Activity Description: Transfer out
Description: Toronto-Dominion Bank
Symbol: TD
Quantity: 100
Price: blank
Total Amount: 0.00 U
NOTE: They BOTH say transfer OUT.
When I look at My Portfolio > Holdings
In the Cash balances section, there is a new line
Description / symbol: U.S. $ Cash
Quantity: 0.00
Average cost: blank
Current price: 1.0380 C
Market value: blank
Unrealized gain/loss: blank
Unrealized gain/loss %: blank
Portfolio %: 0.00%
Details: blank
Action: blank
Not surprisingly, the Cash equivalents and Fixed income sections are the same as always.
In the Equities section, there is a change.
I had requested they transfer only 100 shares of my TD holdings from the Canadian side to the US side of the account.
So this morning there are two lines for TD:
Description / symbol: Toronto-Dominion Bank – TD
Quantity: (original balance less 100 shares)
Average cost: same average cost as all week
Current price: 84.88 (yay! I bought during the dip!)
Market value: an enormous sum
Unrealized gain/loss: another enormous green amount
Unrealized gain/loss %: +4.36% (this is a blended average from multiple buys and sells)
Portfolio %: ***%
Details: two clickable icons
Action: the list is asking me to Select a chosen task if desired.
And the second line
Description / symbol: Toronto-Dominion Bank – TD
Quantity: 100
Average cost: same average cost as all week
Current price: 84.88
Market value: 8,488.00
Unrealized gain/loss: +354.36
Unrealized gain/loss %: +4.36%
Portfolio %: ***%
Details: two clickable icons
Action: the list is asking me to Select a chosen task if desired.
At this point, it looks like I still own 180 shares of TD in the Canadian side of my ledger.
That’s what they warned me when I requested the transfer after phoning in. Apparently on Saturday or Monday (he said “the next day”) I should see the Canadian TD shares vanish and the American TD shares appear.
Stay Tuned!
I’ll update this when the shares appear on the US side and describe how they are displayed and/or where.
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Do you find it tricky to remember you no longer own certain shares in your Canadian trading account because they’ve been journaled to the US side but they are still misleadingly displayed as Canadian? Have you ever sold shares you don’t have? Please share your experiences with a comment.
Thank you for sharing , is there any benefit to do so ? I mean holding CDN stock under US ledge ? I understand the dividend is paid in US but it should be the same amount converted to CDN anyway .
The advantage only applies if the Canadian stock declares and pays its dividend in US dollars. Several companies and investments do this. For example, BEP.UN, Agrium, POT potash, etc. By having the stock held in the US ledger, the USD dividends are paid without any exchange rate fees.
I purchased some POT Shares that were later journaled to the US side of my account – I got tired of my broker taking an exchange rate cut on the dividend.
Given that both the share price and dividend have tanked I want to tax loss sell.
What should the cost base be for these shares?
InvestorLine should be able to tell you the book value of your POT shares. (I don’t work for BMO or InvestorLine, I just use them for my investments and write about them here.)
If you only hold POT in one place, such as your non-registered account, and not in two or more places, such as a RRSP, TFSA and non-registered account, it’s pretty easy to calculate your ACB. If you hold it in multiple places, you have to calculate your ACB across all of your holdings even if you only sell the shares in one type of account.
If you had your dividends being re-invested through InvestorLines synthetic DRIP, the calculation will be a bit more difficult as you will have to add in each time you bought new shares and at what price.
Otherwise, you only need to know your purchase price for the shares, the commission you paid to buy them, your sale price (in CAD) for the shares, and the commission you paid to sell them. If the dividends were not re-invested, they don’t affect the ACB. There was no fee to journal the shares, so no change to ACB there.
You can check the exchange rate on any re-invested dividends or the sale of your shares using the Bank of Canada website http://www.bankofcanada.ca/rates/exchange/10-year-converter/
You can check the CRA website for more info on filling in Schedule 3 and calculating your ACB
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/clc-rprt/menu-eng.html
I hope this helps a bit.
Yes, thank-you. Using my discount broker’s posted book value is probably reasonable for CRA to accept.
I realize this is an old thread, but maybe someone can comment on my experience.
I asked for my shares of Algonquin (AQN/AQN) and Methanex (MX/MEOH) to be moved to the US side of my RRIF (TSX/US symbols).
Both of these stocks are dual listed and pay dividends in US$. I wanted to collect dividends in US$ as well as be able to sell the stock in US$ (both without FX fees).
What happened, is that AQN and MX now appear on the US$ part of my account. Both appear to be still the TSX stocks. Price, dividend and annual dividends are given in C$. Symbol or Methanex is still MX (not MEOH)
So basically they seem to have just moved the TSX stocks into a US$ account. But what will happen to dividends? I don’t want them paid in C$ and then converted back into US$
I wrote to BMOIL using Mylink, but have received no answer yet (3 days)
Sorry this reply is so late. I hope you were able to resolve your problem. I know with my BEP.UN, the distribution payment is made in USD into my USD cash balance. I can then park it in my USD savings account mutual fund, AAT780 until I am ready to re-invest it.
On Quotes+ the dividend is shown in CAD which is confusing as it changes with the currency exchange rate.
I notice for AQN, if in Quotes+ I change the drop-down Country list from Canada to US it shows the price history and dividend in USD.
I see what you mean on the Holdings page it still reports in CAD. I think, though, that if you are sure on the Stock & Option Order Entry screen to select Market: US
and
Settlement Funds US Dollar
BEFORE
you click on the Submit Order button, it should sell on the US exchange and settle directly in USD.
Personally, I think I would phone in to confirm, though, before selling your units of MEOH given the strangeness of the mis-matched trading name.
I’d also keep my order printouts and keep an eye on my monthly statement in case it might be necessary to phone in to reverse any errors.
Sorry for such a late reply. I hope it’s working ok for you!
We currently have stock with ENBRIDGE ( Traded on the NYSE) and when we receive a dividend payment there are Canadian Taxes withheld
If I transfer the socks to a US Brokage firm will there be a Canadian Tax liability?
I’m sorry but I don’t know how taxation works in US brokerages for Canadian listed stocks. Your brokerage can probably advise, though.