# Questrade tax slips



## bettrave (Jan 10, 2013)

Hi,

I have always done my tax return myself without any trouble.
In 2013 I open a Margin account with Questrade.
I just downloaded my tax slips.
However, I don't understand what to do with it.
Can someone help me please?

Thanks.


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## wendi1 (Oct 2, 2013)

More information, please. Which tax slips?


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## bettrave (Jan 10, 2013)

wendi1 said:


> more information, please. Which tax slips?


t5/nr4


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## wendi1 (Oct 2, 2013)

Are you a non-resident of Canada?

T5 shows that you have received investment income (interest, dividends, and the like). You need to fill out Schedule 4 if this is interest, and follow the instructions. If we are talking about capital gains dividends, Schedule 3 needs to be filled out. If you are new to this, I would suggest you try some free tax software, it really makes this easier.

If you have sold securities last year, remember you might have capital losses or capital gains, and are responsible for calculating the Adjusted Cost Base of your sales. http://www.adjustedcostbase.ca/


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## bettrave (Jan 10, 2013)

Last year, I did some day trading and I ended up losing money.
Of course, I stopped.
However, I don't know if I can use the the loss stated on my tax slips and which to use or not.


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## wendi1 (Oct 2, 2013)

Well, if you are completely at sea, I would take it to an accountant or tax preparer. 

I had to learn how to do this for my investment account, but there is a non-trivial learning curve associated with it. If you are not planning on doing this again, just bite the bullet and get someone with some training to do it for you.

You can use capital losses to offset future capital gains, which might save you taxes in the future, so I wouldn't just forget about it.


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## Eclectic12 (Oct 20, 2010)

I'd suggest you start by reading the sticky in this section "How Investment Taxes Work" or check out a tax/investing book as they usually have a good section the different types of income and how to report them on your tax return.

If by loss, you mean a capital loss (CL) from the investments (ex. shares, REITs, ETFs to name a few). You can only use the loss against any capital gains (CG), not other types of income such as employment income.

It is to be used first against any CG from this tax year and if there's still a loss left, it can be carried back three tax years to reduce other CG. If not, it is carried forward indefinitely until you choose to use it against CG.

To be sure it is a loss, you will have to calculate the adjusted cost base (ACB) so that it can be reported on Schedule 3, part 3 of your tax return. (Just be clear that the column labeled "ACB" on the tax form means that total cost for all shares sold where some books/web sites use the same label for the cost of one share.)

What types of investments did you buy? 


These links might help as well.
http://www.milliondollarjourney.com/calculating-your-adjusted-cost-base-acb.htm
http://www.cra-arc.gc.ca/tx/ndvdls/.../lns101-170/127/cmpltng/mtlfnds/menu-eng.html


Cheers


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## Silverbird (Mar 5, 2013)

If you can, you may want to double check the T5 slips as well. My Parents T5's were posted on Questrade - I looked at them last weekend and there were a bunch of dividends missing (mainly right at the start of the year) - We notified them and they stated they knew the issue and will have revised slips posted by March 14th.

Would be a rude surprise if you didn't check them, or weren't waiting on T3 slips anyhow and filed based on the early posted ones. THen a few months later the CRA does the matching and states that you under reported.


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## bettrave (Jan 10, 2013)

I bought ETF and stocks.
I did some day trading and I ended up losing money.
Of course, I stopped 
I think that I can't use all the capital losses.
Can I use some?
Since I ended up losing money, do I have to declare the times that I made money (with the same ETF or stock)?


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## Eclectic12 (Oct 20, 2010)

Silverbird said:


> ... Would be a rude surprise if you didn't check them, or weren't waiting on T3 slips anyhow and filed based on the early posted ones. THen a few months later the CRA does the matching and states that you under reported.


In these days of NetFiling to get a refund in a days to a week, the worst case would be getting a refund and then later getting a tax bill.

The time it happened to me, I was filing by paper so the change was that my refund was lower than expect and the NOA listed different income numbers. It took me a while to figure out what had happened.

Cheers


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## Eclectic12 (Oct 20, 2010)

bettrave said:


> I bought ETF and stocks ..I think that I can't use all the capital losses.
> Can I use some?
> 
> Since I ended up losing money, do I have to declare the times that I made money (with the same ETF or stock)?


For each stock or ETF, you will use schedule 3, section 3 to report the end result of a capital gain or loss. 

For example for one stock: 
bought & sold first time for $100 capital gain,
bought & sold second time for $50 capital loss,
bought & sold third time for $250 capital loss

You'd entry one line on Schedule 3, line three with the total ACB across all three buy/sells, the total proceeds and end up reporting one capital loss of $200 (i.e. +100 - 50 - 250 = - 200 ). If you really want to enter each sell, you can but it's going to add up to the same thing.

[ ... Though if you are not used to doing this and are using tax software, it might be easier for you to report each sale and not worry about having so many lines ... ]


The gains or losses for each stock will add up to a net overall gain or loss (you seem pretty sure the net will be a loss).

Capital losses can only be used to reduce capital gains and must first be used in the year of the sale of the investment. If the net is a capital loss, where you have capital gains in the previous three tax years, you can elect to carry them back and get a refund. If not, then you carry the loss forward until a future tax year when you have capital gain it will reduce.


Did any of the ETFs or stocks pay return of capital (RoC) as part of their distributions?


Cheers

*PS*

Don't forget to learn how to correctly calculate the adjusted cost base (ACB) for all the transactions as doing this incorrectly can cause you to pay extra taxes. For example, I was used to "ACB" meaning ACB per share so when the column on schedule 3 was labelled "ACB" (this one means total ACB for the shares sold), I entered a lot less than I should have.

It took a while to figure out why the numbers were wrong and I had to file an adjustment to get back the extra capital gains I'd paid taxes one.


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## AltaRed (Jun 8, 2009)

As previously said by Electic12, you can use capital losses to offset capital gains of any kind (same or different ETFs/stock) to the extent you have enough capital gains to cover the capital losses. If not, carry them forward to use in future years (or as said, you can carry them back 3 years to reduce cap gains taxes paid in prior years). Yes, you have to declare the times you made money but this all works out on Schedule 3 as negatives and positives somewhat offset each other. As already said, use free tax software such as StudioTax or Taxfreeway to do this for you.

Words of caution though: Depending on your trading patterns/timing, you may have Superficial losses that cannot be claimed. Example: If you sold stock X at a loss on July 2nd, and then re-bought the same stock again within 30 days, e.g. on July 20th, the loss from the July 2nd sale cannot be used. 

It seems to me that you are in over your head at the moment and need to take the time to read and learn about ACBs, Superficial losses, etc. before you tackle this on your own, or perhaps you should employ a tax professional/accountant to do your 2013 tax return this year to get it right or CRA will be questioning your buy/sell activities. It will also be a learning exercise on how to do this in the future.

Perhaps another lesson learned: Don't get into buying/selling of stock, especially frequent/day trading, without knowing the tax consequences of what you were doing.


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## wendi1 (Oct 2, 2013)

That learning curve is steep indeed....:apathy:

And the folks above have even simplified it!


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## AltaRed (Jun 8, 2009)

One more thing that was not mentioned but the OP may already know. The cost (commission) to buy a stock/ETF is included in the ACB of the purchase, while the commission to sell a stock/ETF is a separate line (selling costs). Another reason (beyond the issue of Superficial losses) to enter each buy/sell of the same stock/ETF separately on Schedule 3 rather than working it all out on a spreadsheet first.


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## Eclectic12 (Oct 20, 2010)

AltaRed said:


> ... Words of caution though: Depending on your trading patterns/timing, you may have Superficial losses that cannot be claimed.
> 
> Example: If you sold stock X at a loss on July 2nd, and then re-bought the same stock again within 30 days, e.g. on July 20th, the loss from the July 2nd sale cannot be used ...


Good point.

Though the superficial loss rules mean the loss can't be claimed but it is rolled back into the cost of the re-purchase as part of the ACB calculation.

The end result is that the capital losses that won't be allowed will keep being rolled into the ACB so that when the final sale is made, all of the losses will be included automatically.

http://www.taxtips.ca/personaltax/investing/taxtreatment/shares.htm


So pardon the pun - the superficial loss is gone in the short term but will be back at the end ... :biggrin:


Cheers

*PS*

The OP did say the account was opened in 2013 and implies that all stocks/ETFs were sold in 2013 so the superficial loss rules won't matter as the final sale has happened.


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## bettrave (Jan 10, 2013)

Let say that I bought 100 shares at 10$ each.
Free to buy.
The shares were sold at 8$ each with fees of 5$
Then 2 days later rebought 200 shares at 9$, still free to buy.
Finally sold at 7$ with fees of 5$.

What woub be the loss that I could declare?

Thanks!


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## Eclectic12 (Oct 20, 2010)

My understanding is that the first sale is calculated the same way as Schedule 3, section 3 ... it is just not reported.

Capital Gain/Loss = Proceeds - ACB for shares sold - cost to sell = (100 x $8) - (100 x $10) - $5 = cl of $205

When the second buy happens, the superficial loss is added to the ACB. So where the ACB was $1800, adding in the superficial loss increases the ACB to be $2005.


The final sale is reported on Schedule 3, section 3 of that tax year ... so repeating the formula ....

CG/CL = $1400 - $2005 - $5 = cl of $610.


Note that the final cl is the same as the initial sale cl ($205) plus the final sale cl ($405).


Since in your case, everything happens in the same tax year - there is no difference in the timing or amount. However, if your second sale was in 2017 - the superficial loss means the full cl could only be claimed in 2017 instead of a $205 cl earlier and another $405 in 2017.


Cheers

*PS*

To keep the calculation simple, I assumed that no RoC was paid as a distribution while ETF was held. If RoC was paid, the ACB is going to need to be reduced by the portion of RoC paid - which will increase the capital gain so that the final capital loss is a bit less.


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## Eclectic12 (Oct 20, 2010)

AltaRed said:


> ... Another reason (beyond the issue of Superficial losses) to enter each buy/sell of the same stock/ETF separately on Schedule 3 rather than working it all out on a spreadsheet first.


Personally - since I'm using tax software, I prefer to enter each transaction. If I ever need to review it years later, the individual entries are much easier to follow as it matches the broker summary.

However, where someone is using a spreadsheet to consolidate into one entry per stock, one could setup the columns to match the tax forms, total each column and in that way, end up with the total cost to subtract.


Cheers


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