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Dividends on Foreign Stocks through the Pink Sheets?

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Dividends on Foreign Stocks through the Pink Sheets?

Postby matunaagd98 » Mon Jul 30, 2012 4:01 pm

I've found a respecatble company through that trades through the Pink Sheets (believe it or not) and I'm curious as to how dividends paid by this company will be taxed and distributed. The company trades under the ticker CUPUF in the Pink Sheets, and is listed in US$ on the Toronto Stock Exchange under CUP.U. They're basically the utility that services the Cayman Islands, a low risk play as far as the Pink Sheets are concerned. They pay a 7% dividend. A few questions:

I have a TD Ameritrade account, and can purchase shares of CUPUF. I understand the liquidity risk, and would like to purchase a few hundred shares, but want to make sure that I'm not getting into anything sticky in the tax realm. Does anyone have any experience in the Pink Sheets similar to this that they'd be willing to share?

Thanks in advance,

Bob
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Dividends on Foreign Stocks through the Pink Sheets?

Postby rorry94 » Mon Jul 30, 2012 4:06 pm

I've found a respecatble company through that trades through the Pink Sheets (believe it or not) and I'm curious as to how dividends paid by this company will be taxed and distributed. The company trades under the ticker CUPUF in the Pink Sheets, and is listed in US$ on the Toronto Stock Exchange under CUP.U. They're basically the utility that services the Cayman Islands, a low risk play as far as the Pink Sheets are concerned. They pay a 7% dividend. A few questions:

I have a TD Ameritrade account, and can purchase shares of CUPUF. I understand the liquidity risk, and would like to purchase a few hundred shares, but want to make sure that I'm not getting into anything sticky in the tax realm. Does anyone have any experience in the Pink Sheets similar to this that they'd be willing to share?

Thanks in advance,

Bob
CUPUF has traded ZERO shares 5 of the last 10 trading days, and an average of 319 daily over the past 3 months. Are you sure that you understand the illiquidity risk? Really sure?

There is a tax issue regarding foreign dividends, but it has nothing to do with pink sheet status. You would receive dividends net of Foreign Tax. The Form 1099 from your broker would note "Foreign Tax Paid". You take a credit for that on your IRS Form 1040.
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Dividends on Foreign Stocks through the Pink Sheets?

Postby luki14 » Mon Jul 30, 2012 4:17 pm

I agree with @jerry....this is thinly traded on the Canadian side as well with only 1000-3000shares at most traded per day.

If you want a respectable Canadian dividend company that is a pink choose Petrobakken Energy Ltd. (PBKEF)

http://tmx.quotemedia.com/quote.php?qm_symbol=PBKEF:US

it trades between 50,000 - 100,000 shares per day and has a 5% dividend

The financials can be see using the Canadian listing [TSX: PBN] (where it trades one million + shares/day)

http://tmx.quotemedia.com/financials.php?qm_page=82567&qm_symbol=PBN
http://tmx.quotemedia.com/financials.php?qm_page=44882&qm_symbol=PBN

pretty nice chart too

http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=Stock&symb=PBKEF&x=35&y=13&time=7&startdate=1%2F4%2F1999&enddate=3%2F12%2F2012&freq=1&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=3&maval=20%2C50&uf=8&lf=1&lf2=2&lf3=4&type=4&style=320&size=4&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=11
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