# Capital gains in a joint account



## Davis (Nov 11, 2014)

Spouse and I combined our unregistered brokerage accounts this year to simplify portfolio management. I kind of regret doing it because now I realize that tax reporting is going to be a mess. 

While it seems straightforward to say the I contributed 70% of the capital, so I should claim 70% of the dividends and interest, I am concerned about capital gains. I would be happy to apply the same ratio to capital gains, but I am concerned about what CRA will say.

If I bought 100 shares of BCE in 2013, transferred them into our joint account in 2015, then sold them, will CRA expect me to claim 100% of the gain? 

The reality, of course, is more complicated. It probably looks something like this: I transferred 500 shares in, Spouse transferred 350 shares in, then we sold 675 shares and continue to hold 175 shares. And they weren't all shares of BCE. There were some shares of Bell Aliant that were converted to BCE. Ack.

Any thoughts?


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## AltaRed (Jun 8, 2009)

I don't have actual facts to prove it but anecdotally from reading elsewhere from time to time, CRA generally won't care if you did a weighted average on assets contributed to the joint account and then use the same percentage across the account for income and cap gains/losses from year to year. Your specific Bell example is a little unique in that it could be perceived that you purposely put the Bell shares into the joint account just to distribute income/gains in a short time. 

If challenged, I would argue that is just how the ball drops and somewhere sometime, a first asset example from the joint account is going to be sold and handled in a weighted average fashion whether today or in 2020. Ultimately, the key is to be consistent across all assets in the account from this day forward.


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## Davis (Nov 11, 2014)

Thanks for the reply, Altared. As I have at least a dozen stocks in the account, I think I can show that this was done for portfolio management purposes, not tax planning. As you say, consistent treatment will have to be the order of the day. Regards,


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## OhGreatGuru (May 24, 2009)

I'm pretty sure the way it works according to CRA's rules is that the 70/30 split apples to the whole account, and to every security in the account. When you merged the accounts, you were deemed to have transferred a 30% interest in all your securities to your spouse, and your spouse was deemed to have transferred a 70% interest in all her securities to you. All the securities are jointly owned in proportion to your overall capital contributions. There is no capital gains tax between spouses on this "deemed disposition". It only affects the attribution rules for earnings on the account after the date of the merger.


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