Disposing of Nortel stocks to claim capital loss
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Thread: Disposing of Nortel stocks to claim capital loss

  1. #1
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    Disposing of Nortel stocks to claim capital loss

    Hi,
    How does one go about disposing of Nortel stocks in order to be able to claim a capital loss? According to BMO, they suggest signing a Deed of Gift, donating the worthless stocks to them, which will trigger a "loss" on my monthly statement, which I would use for my taxes.
    According to the CRA, if Nortel went bankrupt in 2009, they are suggesting I amend my 2009 income taxes, claim the entire loss that year and include a letter saying that I am claiming a deemed disposition under 50(1) of the Income Tax Act. This will mean I keep my shares, but claim the loss from what I understand.

    Has anyone tried the Deed of Gift method?
    Also, how can I find out the exact date Nortel went bankrupt and/or delisted on an official document?

    Any guidance would be appreciated.


  2. #2
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    yes depends on who you gift to though. if it is deemed disposed it will trigger the cg/loss. also bear in mind the last day for tax loss selling was last week.

  3. #3
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    Quote Originally Posted by redsgomarching View Post
    yes depends on who you gift to though. if it is deemed disposed it will trigger the cg/loss. also bear in mind the last day for tax loss selling was last week.
    I would be gifting to BMO Investorline through a Deed of Gift form.

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  5. #4
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    Quote Originally Posted by homemade View Post
    I would be gifting to BMO Investorline through a Deed of Gift form.
    should be fine would be deemed disposed and a transaction would be triggered. would make sure though.

  6. #5
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    Quote Originally Posted by homemade View Post


    Also, how can I find out the exact date Nortel went bankrupt and/or delisted on an official document?
    January 14, 2009: Nortel files for protection from creditors, in the United States under Chapter 11 of the United States Bankruptcy Code, in Canada under the Companies' Creditors Arrangement Act, and in the United Kingdom under the Insolvency Act 1986
    Any guidance would be appreciated.[/QUOTE]

  7. #6
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    Quote Originally Posted by homemade View Post
    ... How does one go about disposing of Nortel stocks in order to be able to claim a capital loss?
    I sold Nortel before bankruptcy but have had similar for other stocks. I simply filled out the Schedule 3, Part 3 form on the year of the stock was dropped off the exchange or bankruptcy as if it was a no-commission sale for a loss. I saved in PDF form news articles, in case I was asked about it by CRA.

    So far, no questions have been asked and the CL was acknowledged in the NOA or in some cases, reduced the CG being reported that year.

    Then stock still shows on my brokerage monthly statement.


    Quote Originally Posted by homemade View Post
    ... According to BMO, they suggest signing a Deed of Gift, donating the worthless stocks to them, which will trigger a "loss" on my monthly statement, which I would use for my taxes.
    It would have the advantage of taking the shares off the brokerage statement. Not much of a difference though.


    Quote Originally Posted by homemade View Post
    ... According to the CRA, if Nortel went bankrupt in 2009, they are suggesting I amend my 2009 income taxes, claim the entire loss that year and include a letter saying that I am claiming a deemed disposition under 50(1) of the Income Tax Act. This will mean I keep my shares, but claim the loss from what I understand.
    Except for the letter making it clear it is a deemed disposition ... this is what I have done.


    Quote Originally Posted by homemade View Post
    ...Has anyone tried the Deed of Gift method?
    Not I ... but I can recall other posts saying people have done this.


    Cheers

  8. #7
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    Quote Originally Posted by homemade View Post
    ... Also, how can I find out the exact date Nortel went bankrupt and/or delisted on an official document?
    Not sure why an exact date if needed but here are some links you can print as PDFs to capture.

    http://www.cbc.ca/news/business/key-...story-1.802117
    http://www.canadianbusiness.com/tech...se-of-a-giant/


    Cheers


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