# How to report on T1 when the company delisted from TSX



## shanti (Dec 3, 2011)

I held LLL(lululemon) shares. The company delisted from TSX and gave us LULU listed in the US exchange last year. How is this event treated for the income tax reporting? As a deemed disposition of LLL? Or, is there any election to choose the original cost of LLL as the OC of LULU?


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## OptsyEagle (Nov 29, 2009)

This is not a disposition for tax purposes. You obviously know what your cost base is for LLL. Since it is LULU now, when you sell it, convert the $US to $Cdn and the $Cdn amount you sold it at will be the proceeds. You will owe tax on the taxable capital gain that comes from that, or you will declare a loss, whatever it ends up being.


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## Amira (Aug 6, 2013)

Any advice on what to do when a company is delisted because it's been privatized (such as Medicago) or taken over (such as Coastal Energy)? How should such events be reported on my tax return?


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## OptsyEagle (Nov 29, 2009)

The tax act wants you to only report shares that have been disposed of. It is not really interested in shares that are delisted or in most cases where they are simply changed into other shares via a merger.

If you know the shares are worthless, your broker will usually be willing to buy them from you for 1 cent or something, so you can take a tax loss, but at that time, they are disposed of and your future benefit from them is over.


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## Amira (Aug 6, 2013)

Oh, perhaps I gave you the wrong impression inadvertently... in both examples I noted above, the companies were delisted after their shares were purchased by the "takeover" companies (at a nice premium), so I made profits on both. Cash was the only option; shares in the takeover companies were not offered. Do I report these transactions on my tax return just as any other stock sale resulting in capital gains?


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## OhGreatGuru (May 24, 2009)

Yes. You received cash for your shares. The nature of the buyer, and the fact that it was involuntary on your part, is irrelevant.


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## OurBigFatWallet (Jan 20, 2014)

Optsy is right, this isn't a disposition for tax purposes. You just need to continue to track the ACB for when you sell to calculate the gain/loss


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## OhGreatGuru (May 24, 2009)

Optsy is right wrto Shanti (the OP) But Amira presented a totally different scenario, which is what I was replying to.


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## Amira (Aug 6, 2013)

Thank you for the clarification!


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