<<Just got on board via rec. of investment news advisory that vkq was good play. Glad I checked the message board first. Am I correct in that everyone is paying unexpeccted Canadian taxes also, or is it how they are classified or both. Sorry for being stupid but this is a new situation dealing with securities subject to a foreign gov. Thanks>>
There is no problem in a taxable account, as you can recover some or all of the 15% tax paid to Canada by filing Form 1116 with your US taxes. Let's be clear, you don't get it back from Canada, but as a credit against your US taxes. That is a simplified explanation, but gives you the general idea. The problem is now in US IRA and Roth and 401-K accounts, which previously were tax exempt due to the US/Canada tax treaty. Canada has now violated that treaty, as of the Feb. 15 payments, and has now retroactively taxed the January payments as well.
Any new Canroy purchase should be in a taxable account only.
I talked to Darci Jensen in the Ameritrade Tax Dept., [a very reliable source] and she said that DTC provided a list of Canadian securities by name and CUSIP # and directed them to go back and tax the January distributions in IRA accounts....if you have not yet seen this in your IRA, you will.