# Help with a schedule 3 form



## Halomon1357 (Apr 21, 2014)

Hello all, I hope someone here can answer this for me. I think I've figured it out but I want to check with others first.

So I have a 2 questions about schedule 3 forms.

So i have to fill out capital gain this year from my TD waterhouse investment account.

The bank only sent me a T5008/RL-18 Trading Summary form and I'm trying to get it entered into Turbotax. The schedule 3 form seems fairly straight forward but I'm not clear on a few points.

So in 2011 I bought 300 shares of citigroup and 750 shares of RIM (I know dumb move). In 2013 I bought 3800 more shares of Citigroup with life insurance money while I waited to figure-out a long term plan. I sold all the stock later in 2013.

Now for the schedule 3 the cost of the RIM stock is blank on the 2013 print-out, so I use the cost on the 2011 one right? And I add the cost of the first purchase in 2011 of Citigroup to the cost of the second purchase for a total. 

Also it has a US account so I have to adjust the amount by that years average exchange rate, on the bank form, and those are the new values right?

Thanks for any help you guys can offer.

Halo


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## Eclectic12 (Oct 20, 2010)

The Schedule 3 capital gain, section 3 "Publicly traded shares, Mutual Funds ..." has columns for:

1) Number sold
2) Name of fund/corp. & class of shares
3) Year of Acquisition (typically year of first purchase is used here)
4) Proceeds (what was delivered to you)
5) Adjusted Cost Base (the wrinkle here is CRA means for the total shares sold where a lot of other sources mean the per share/unit ACB).
6) Outlays & Expenses from disposition (typically the commission to sell).
7) Gain (or Loss) by taking the 4) Proceeds and subtracting both 5) ACB and 6) Outlays.


You seem to be interested in the ACB calculation so here is a link:
http://canadianfinanceblog.com/how-to-calculate-your-adjusted-cost-base-acb/

Trying to do this without keeping records as you go can be at best tedious or at worst (if there is unknown info such as original purchase price/amount or return of capital [RoC] ) so most people will setup some sort of bookkeeping in Excel or software so that as each event happens, the details can be recorded while it is fresh in the investor's mind.


These sound like two stocks so the ACB calculations are the easiest of the range of investments available.
For RIM, there seems to be one purchase and one sale (again a simple case).

total ACB = (price per share x number shares bought) + commissions 

So if RIM was bought for $10 (illustration price) with a $10 commission to buy, the total ACB = (750 x 10) + 10 = $7510
If the proceeds were $300, with another $10 commission to sell, schedule 3, section 3 should be:

750 sold RIM 2011 $300 $7510 $10 -$7220 (i.e. a Capital Loss)


There seem to be two differences for the Citigroup stock. The first you've already mentioned is that there are two purchases. Since the sale happened at the end, for all of the Citigroup stock, you just need to add up what the two purchases ACB is. Remember that if there were two commissions paid to buy, these need to be included in the ACB calculation.

The second is the USD (I presume this is where your currency question comes in). 

Tax tips says:


> The adjusted cost base of the foreign shares must be calculated in Canadian dollars.
> 
> If foreign funds were used to purchase the shares, the exchange rate on the date of the purchase (trading date, not settlement date) is used to convert to Canadian dollars. You may find information elsewhere that IT133, which has been cancelled and is not available online, indicated that the foreign exchange rate on the settlement date should be used for conversion to Canadian dollars. I have a copy of IT133 which confirms in paragraph 11 that for 1974 and later taxation years, the settlement date is the date when ownership of the share is transferred, which is not in question. It does not address the foreign exchange rate conversion date.
> 
> When shares in the foreign corporation are sold, the proceeds are converted to Canadian dollars using the exchange rate on the date of the sale.


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


I don't have personal experience as I have my USD investments in my RRSP so none of this is required.


Cheers


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## AltaRed (Jun 8, 2009)

That explanation looks right although the capital loss of -280 is not correct. $7510 ACB less $300 in proceeds = -$7210 capital loss plus another $10 in selling expenses. 


For most of us, using the forex rate of USD/CAD as of the date of each transaction is the appropriate thing to do. Some have use forex rates as of Settlement date rather than Transaction date. To my knowledge CRA does not care as long as one is consistent all the time for every asset for every year, i.e. it all works out in the end. Apparently, frequent traders have used the annual forex rate published by the BoC and that seems to fly as well BUT clearly, for obvious reasons, the forex rate as of the date of transaction is the proper one.


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## Eclectic12 (Oct 20, 2010)

^^^^

Wow ... I usually catch such a big difference as -$280 versus -$7220.

I obviously needed more coffee this morning! :biggrin:


Thanks for the correction ... which I have added to the post.


Cheers


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