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Goldcorp Inc. Message Board

  • htiek_au htiek_au Jun 25, 2005 4:47 PM Flag

    Goldcorp dividends in perspective

    Before this mb gets too heavily into a dividend protest, let's place the dividends in perspective a bit.

    I ran a stock screen on gold/pm stocks that pay a dividend. Only 12 primarily gold/pm-related companies on the major exchanges paid any dividend whatsoever.

    Of those twelve, goldcorp tied for fifth with GoldFields. In fact, goldcorp is AHEAD of both Barrick and Newmont (significant, IMO).

    Here is the list, in order.

    AAUK 3.5%
    AU 1.7%
    BVN 1.6%
    HMY 1.2%
    GG 1.1%
    GFI 1.1%
    NEM 1.0%
    ABX 0.9%
    IAM 0.7%
    PDG 0.6%
    RGLD 0.6%
    AEM 0.2%

    Of course, the accuracy of this screen is subject to out of date information. If anyone has a more accurate screen, please share. I did verify Newmont's dividend at their corporate website.

    The statistical flaw in this analysis is that when gg goes to $25, the % dividend will drop to .7% LOL.

    I'm not bashing any of the other miners, just presenting dividend facts.

    GL all.

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    • I appreciate very much your efforts in explaining trust units and their application to Goldcorp shareholders. Not only is it useful for those who are not educated in Income trusts but your effort could well result in an increase in market price of Goldcorp shares apart from the change which will take place with the release of the quarterly results for Goldcorp in a few weeks.

      Thanks again!

    • yep, fairmark is a good source. Haven't looked at it in awhile, but they used to have a pretty good message forum there too covering taxes, etc.

    • "The contribution is not tax deductible"

      Aha ... !!!

      That is the reason that withdrawals of the amount of "contributions" is not taxable, it is hust your own "after tax" money that you are getting back, a "return of personal capital" so to speak ...

      "the ***growth*** is tax-free and approved withdrawals are not taxable."

      It is the EARNINGS on that capital that are sheltered from taxation and they become "tax free" earnings upon withdrawal based upon the restrictions that make up the "qualified" withdrawal ...

      Now THAT makes more sense ... but still, for those than can disclipine themselves and can wait for what may be many, many years, it can be a most excellent tool, true tax "avoiding", lol ...

      Good stuff and thanks ... the fact that contributions to a ROTH IRA are NOT a personal tax deduction puts it in a much better and clearer perspective ...

      jc

    • Many thanks for that link ...

      Yes, it is a good deal, but my goodness there are so many restrictions required to eventually get that tax free status that most holders will be long dead and buried before they qualify, lol ...

      "age 59�, death, disability, first-time homebuyer"

      I note there is also a 10% penalty in addition to personal income tax if withdrawn outside the many restrictions ...

      But yes, overall a strong plan for those capable of disclipined tax planning ...

      For Canadian tax payers, we have the RRSP/RIF plans which I now gather are more like your regular IRA plans which are a means of tax deferal to a later date when you expect your personal tax rate to be lower, as well as having those tax funds at work inside the RRSP/RIF during that period ... and of course no withdrawal restrictions except that it is taxable in the year of withdrawal, no matter what age or how soon into the plan ...

      Thanks again ...

      jc

    • Here's the link. Nothing beats a Roth IRA in my opinion as the gains are 100% tax free. Another benefit is that you can withdraw without penalty the origional "taxed investment amount" at any time.

      Great eh???

      -Contrarian

      http://www.fairmark.com/rothira/

    • Hey JC,

      Your description is closer to a traditional IRA, which allows a tax deduction for the contribution. The growth is tax deferred and the withdrawal is taxable as income.

      The Roth IRA is an IRA in reverse. The contribution is not tax deductible, the growth is tax-free and approved withdrawals are not taxable.

      There is more to it than that simplified explanation - qualifications and various rules. Check out this link at about.com. It explains the different type of savings and investment plans:

      h**p://retireplan.about.com/od/rothandtraditionaliras/a/IRA_101_roth.htm

      Summary:
      A Roth IRA is primarily an individual savings plan. Contributions can be made up to a specified limit on a non-deductible basis. This means, you can make a contribution to your Roth IRA but not take a deduction on you income tax for the contribution like you can with a traditional IRA. Withdrawals are tax free within certain limitations. Withdrawals can be made without penalty once your reach the age of 59 1/2 provided the funds have been in the account for 5 years. You can continue contributing to a Roth IRA even if you have reached the age of 70 1/2.

    • "but a roth ira avoids the tax"

      Being a Canadian, my knowledge of the "Roth" IRA is not perfect ...

      My understanding is that profits earned in a Roth IRA are not taxed, but when the holder of the Roth IRA withdraws funds from the Roth IRA, it becomes "income" to the individual and thus becomes taxable in that year of withdrawal ...

      That is, that tax is not "avoided", it is just defered to a later date, the concept being that the tax rate of the holder will be lower at the time of withdrawal ...

      But once again, it does not "avoid" the tax completely, it just moves the year of accountibility ...

      If this is not correct, would you please explain it to me or give me a link to where I could find the information ...

      Thanks ...

      jc

    • but a roth ira avoids the tax

    • The 15% to which you refer is not an "income tax", it is a "non-resident withholding tax" ...

      Yes, as an American you can claim a credit for that and I have been very sepcific that it can be done ... I have even posted the various US tax form numbers and instructions on how to do that for US posters ...

      But that does NOT contradict or negate my statement that the gross amount of the trust payment is TAXABLE INCOME to both Canadian and American citizens and must be recorded on your annual personal income tax returns and taxed at your PERSONAL tax rate ...

      Please do NOT mislead American investors that by converting to a trust means that there is no tax to be paid or that there is just 15% which you get back ...

      That is a complete and utter falsehood ...

      If you hold the trust in an American IRA or a Canadian RRSP/RIF, then the tax liability is DEFERRED until you withdraw it, the personal tax liability is NOT eliminated or avoided ...

      You are very misleading ...

      "Most have a portion of the Distribution listed as ROC. This is not taxed."

      Well, duh, seeing ... the "ROC" stands for "Return of Capital" which means you are just getting your own money back so why would there be a tax on it ... ???

      By the way, the "ROC" is something to consider in your rush for conversion to a trust and the supposed high return ... If you hold a $100 trust and you receive a disbursement of $10 which shows $8 of that was ROC, then your true investment return is NOT 10%, it is 2% because that $8 is just your own money being returned to you ... (give me $100 and I'll give you $11 per year for the next 10 years, of which $10 per year will be "ROC" ... is that a good deal for you ... ???)

      And last, seeing, since you have me on "ignore" and do not read my posts, then you are not in a position nor are you qualified to comment on my posts ...

      The right to use the "ignore" feature is your choice, but if you do so, please have the intellectual honesty and integrity to shut the fuck up about that which you have chosen to make yourself ignorant ...

      Voluntary ignorance is still ignorance ...

      jc

    • Inverness:

      I guess that keeping JC on Ignore may be fine for me but not for this Board. His info, though at times sprinkled with some truths, are mostly very misleading, and I'm going easy on my wording here.

      I suggest that people must simply research the info themselves or ask JC to show a supporting link that confirms what he is saying.

      On Taxes for US Holders of a CanRoy/Income Trust, it's 15% Max or lower if your tax bracket is lower. However most Brokers will deduct the 15% from you Dividend payment. If you hold the Trust in a Taxable account, you have your tax accountant file a form for a fully recoverable tax credit. As of this year an IRA now has the 15% deducted but I still prefer to hold my Candian Income Trusts in an IRA, since it's the Cap Gains I want to avoid paying taxes on.

      <<< The amount of Canadian withholding tax deducted from the cash distributions may be reported by U.S. individual unitholders on IRS Form 1116 "Foreign Tax Credit" to offset a portion of the U.S. tax liability as a result of the distributions; alternatively, U.S. unitholders may elect to deduct the Canadian withholding tax in the determination of taxable income. >>>

      Most Canadians use their equivelant of an IRA, I believe they have a couple on tax-free retirement vehicles, RRSP I believe is one.

      Also, please remember that all Trusts are not the same. Most have a portion of the Distribution listed as ROC. This is not taxed. Another benefit solely for Canadians, at least so far, is that many Trusts offer DRIPs, but only for Canadians. I don't mind at all, seems fair to me.

      I'm a US investor but a search shows that a Canadian investor in a Trust, if it's held in a taxable account, is taxed this way (the same as it would if it were Interest Income):

      <<< TAXABILITY FOR 2004

      For the 2004 taxation year, unitholders of the Trust were paid $3.615 per Trust Unit in distributions. Of this distribution amount, 45 percent or $1.627 per Trust Unit, is a tax deferred return of capital and 55 percent, or $1.988 per Trust Unit is taxable to unitholders as other income (taxed at the same rate as interest income).>>>

      All Canadian Trusts give detailed Tax info to both Canadian and US and Foreign Holders. You just have to go to their Homepage for this. It's also mailed to Unitholders each year.


      http://www.vermilionenergy.com/faq_vet.html

      ht_p://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2005/06/12/BUGE0D65N91.DTL

      The last item I want to include is about FRO, that's the US symbol. FRO is not a Trust, nor Canadian, but I used them as an Income Producer. They paid out about 80% in Dividends the past year (I don't own them now andI know 80% is hard to believe). Their main shareholder, Pres. & CEO John Fredriksen, and his "moves" in the use of spin-offs to FRO shareholders can be used as an example by other companies, especially those who wish to eliminate any Foreign subs. Example: GG's Mexican Holdings "could" be lumped together and spun-off to GG shareholders, as can Silver Wheaton. The benefit here would be the lowering of GG's shareprice while increasing the account value of GG shareholders by the addition of the spun-off shares. There is a good reason to want to lower the price of GG, while greatly increasing the real Capital Gains for current GG shareholders. You would just have one or two more stocks added to your portfolio but really it's all your GG investment in a few pieces.

      That's all I have time for. You all can research this "stuff" yourself and should. Remember, Can. Trusts have the ability to be creative in Conversion and Operation. I would think that with the Market savvy Background of McEwen (don't know that of Telfer) a Trust conversion should be done. I know others may disagree but this is my view.

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GG
28.18-0.26(-0.91%)Jul 29 4:03 PMEDT

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