Calculating Capital Gains in Aggregate using Yearly statements

[crozfader]

My broker does produce a T5008 that contains in aggregate form my total capital gains/losses for the year, this is exactly what I was questioning in the first place... I wanted to know if I could readily use the filled form my the broker produces, hence my original post...

What do you think of that?

Thanks for all the help, much appreciated.

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BTW, for form T5008 - where you thinking *you* would fill it out?

If so, this CRA link says the T5008 is for those buying securities on behalf of others - which does not seem to be the case here. It would be your broker, who bought on your behalf, who would send a T5008 to you.
http://www.cra-arc.gc.ca/tx/bsnss/tp.../prpr-eng.html


Cheers[/QUOTE]

[Eclectic12]

My broker does produce a T5008 that contains in aggregate form my total capital gains/losses for the year, this is exactly what I was questioning in the first place... I wanted to know if I could readily use the filled form my the broker produces, hence my original post...

What do you think of that?

Thanks for all the help, much appreciated.

[/QUOTE]

Fair enough ... re-reading the post plus some of the others had me thinking you were going to fill one out yourself.

As for using it - as mentioned upthread, there is risk with using the aggregated numbers without cross-checking it.

If you are going to cross-check, then IMO it is far easier to take a few minutes each time a buy/sell is made and update the numbers in say, a spreadsheet. That way, when the T5008 is received - most of the numbers needed are already current plus in one place.


To illustrate why I'm a fan of keeping up to date - when I bought trust units, I thought they were the same as a regular share and didn't bother keeping up to date. When I sold eight years later, I discovered I needed to update the Adjusted Cost Base (ACB) for the Return of Capital (RoC) part of the cash payments. As the trust had been bought out before the sale - determining how much of the cash paid was RoC was easy for the new trust units but determining the original payments was painful. While the T3 detailed summaries are better these days, a spreadsheet that is no more than a year out of date I find handy.


Cheers

[TaxGuy]

I would agree with Eclectic12, to cross check. In fact, I would say that its more effective to record each trade in a spreadsheet and keep track. Brokerages are notoriously inaccurate when capturing the original cost of securities and send out incorrect statements all the time!

[Eclectic12]

^^^

The OP has already indicated there are some buy transactions in previous years, resulting in a capital loss for 2011. So at minimum, unless the broker's statement is deemed right and whatever consequences down the road are accepted - there is a least a bit of research needed.

A spreadsheet that is kept reasonably current IMO allows one to focus on calculations and the cross checking instead of " ... now what year was this bought for how much?"


Then too - if the amount is wrong where CRA decides to assess a penalty, it is the investor who is on the hook for any owed taxes and/or penalties, not the broker.

If the error is found a couple of years down the road, the penalty assessed can be substantial.


For the keying error by CRA I mentioned up thread, the tax returns had already been filed/assessed at least two years previously. Then the keying error happened so that the first notice I received was the "notice of re-assessment, you over contributed and owe $5x plus $7x in penalties/interest".

The two parts that surprised me were that:

1) After twenty minutes on the phone arguing this was not possible due to factors a, b & c - please check the numbers for anything strange - the clerk reviewed the numbers. The keying error was found/fixed in under five minutes.

2) Fixing the error only meant that the room was made available again. To use the room, I had to file a T1-ADJ to adjust each of the affected tax returns (four returns as I recall). The explanation was that I might choose to save the room for another year. Who in their right mind would choose to pay taxes (and penalties) they don't owe?

It didn't take long to file the adjustments and everything was properly re-re-assessed after about three weeks.


Cheers