# Do i report capital gains only because i changed brokers?



## Justin1980 (Feb 23, 2013)

Hey all,
i have a question i was hoping someone could help me with?

I own shares in a number of companies. Those shares had originally been purchased through my broker, which was RBC. I later had all my shares transferred to a new broker - Questrade, where i still to this day own them.

I have been told from a friend that upon the transfer, these shares become known as a "deemed disposition," where i have to consider those shares as having been sold from RBC and bought from Questrade and calculate the capital gains to report for this years income taxes.

Can you confirm or deny whether or not this would be the case? It doesn't seem correct to me, but i really dont know.

Thank you.


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## Eclectic12 (Oct 20, 2010)

When the shares were transferred, were they transferred from a taxable account to a registered account (i.e. TFSA or RRSP)?

This is when there would be a "deemed disposition" due to a transfer, with the related capital gains to calculate and possibly pay taxes on.
http://www.taxtips.ca/personaltax/investing/transfersharestorrsp.htm

If shares were transferred from a taxable account at one broker to a new taxable account at another broker, then there is no deemed disposition or capital gains to report as only the broker holding the shares changed.


Cheers


*PS*

Maybe your friend is confusing a transfer to a registered account with change of brokers?


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## Justin1980 (Feb 23, 2013)

They were all transferred to the same account type; 
ie TFSA within RBC to TFSA with Questrade, 
- RRSP with RBC to RRSP with Questrade and
- Margin with RBC to margin with Questrade.

So does this mean that i would NOT report them?
Thank you.


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## yupislyr (Nov 16, 2009)

Since you say that they were indeed just transferred from one broker to another, then yes, there is nothing to report.

Nothing was sold. Nothing was bought.


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## Guban (Jul 5, 2011)

Justin1980 said:


> They were all transferred to the same account type;
> ie TFSA within RBC to TFSA with Questrade,
> - RRSP with RBC to RRSP with Questrade and
> - Margin with RBC to margin with Questrade.
> ...


I hope that things were transferred in kind.
If there was a disposition, this could be a nightmare. Were the funds moved out of an RRSP, and then recontributed? Hope you have the RRSP contribution limit, and won't miss the permanently eliminated RRSP room that such a move would cause. The TFSA could run you into similar problems if this was done in one calendar year, as you may be offside and facing the 1% per month penalty. 

Capital gains on the margin account don't sound like a problem at all, as you indicate that they were transferred, and not sold.


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## Justin1980 (Feb 23, 2013)

Yes sir, everything was indeed transferred "in kind" from each account type.


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## Eclectic12 (Oct 20, 2010)

Justin1980 said:


> They were all transferred to the same account type;
> ie TFSA within RBC to TFSA with Questrade,
> - RRSP with RBC to RRSP with Questrade and
> - Margin with RBC to margin with Questrade.
> ...


As long as the shares/units were transferred without being converted to cash, there is no real sale and there is no deemed disposition. Since no shares were deemed sold and it looks like no shares were actually sold - there is nothing to report.

This is the same as transferring a savings account from one bank to the other. The cash that has already had taxes paid on it, transfers with nothing to report for taxes. Interest that was paid to either savings account, will still be reported and taxed but it's fresh money being paid instead of the base amount.

If a dividend paying stock was transferred without selling it - there is nothing to report for the transfer. The dividends paid will still have to be reported/taxed ... the only difference is there will be at least two T5 forms as each broker will report the dividends received. The following year after the transfer, there will be only one broker and one source for the T forms.




Justin1980 said:


> Guban said:
> 
> 
> > I hope that things were transferred in kind.
> ...


This is a good point ... which I was assuming was true as there was no mention of cash or having to re-buy the shares. It is good to confirm though.


Cheers


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