ROC in HHIS (non-registered account)
I have been doing some research on the Return of Capital (ROC) for CC EFTs to support my current experiment with HHIS in my non registered account.
HHIS pays high monthly distributions, and a part of it is often ROC. I won’t be able to know the exact amount of ROC until year end when Harvest release their tax reports. Looking at their website, 2025 ROC was $1.76 per unit.
I won’t be taxed on the ROC which I recieve as part of the distribution but it reduces the Adjusted Cost Base (ACB) over time. This means that if I buy HHIS for $10,000, over time, I receive $3,000 in distributions and let’s say $1,800 of that is ROC
Assuming I already got $3,000 in cash and my ACB drops from $10,000 to $8,200. If I consider selling HHIS for $11,000, my taxable gain is $11,000 − $8,200 = $2,800.
Just thought of sharing this takeaway from the PLOC experiment with HHIS when it comes to taxes. If there are any input or corrections to my understanding please feel free to add a comment as I am still figuring this out as I go.
In the next few days, I’ll post the progress of my Experiment 🔬 Portfolio.
