# "In Kind" transfer to Registered Account at a loss



## Skye (Sep 3, 2011)

If I make an In Kind transfer at a loss from my Margin Account to my TFSA how do I report the transaction to CRA. Do I reduce the ACB so that the reported P&L is zero? If Purchase of Disposition is $100 and my ACB is $200 for a superfical loss of $100 do I report PofD of $100 and ACB of $100 to CRA with a net profit of $0 ?? Thanks for any input. CRA and discussion groups don't talk about this other than to say don't do it. :-(


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## GoldStone (Mar 6, 2011)

Did you get a tax slip from your broker? What does it show? Typically you report whatever your broker reported.

Sorry I can't be more specific. I've never done an in-kind transfer at a loss.


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## Spudd (Oct 11, 2011)

The loss is not admissible if you transfer in kind, so there's no reporting of the transaction required. At least that is my understanding and how I have handled it.


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## cainvest (May 1, 2013)

Spudd said:


> The loss is not admissible if you transfer in kind, so there's no reporting of the transaction required.


That's my limited understanding of it as well, unless you realized a gain or loss by selling there is nothing to claim.


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## OptsyEagle (Nov 29, 2009)

and don't forget about the 30 day re-buyback wash rule, which prevents you from selling it, to declare a loss, if you buy it back in the TFSA within 30 days.


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## Eclectic12 (Oct 20, 2010)

Spudd said:


> The loss is not admissible if you transfer in kind, so there's no reporting of the transaction required. At least that is my understanding and how I have handled it.


Really?
CRA won't see it as a red flag to dig into it when there's an "in-kind" contribution to the TFSA of $X and *nothing* is reported for the deemed disposition on schedule 3?

I would think it would be better to report it as a $0 transaction on schedule 3 (it is a deemed disposition) and attach a note indicating there was a CL but as one is aware it can't be claimed, schedule 3 has been written up as $0.


Or better yet - call CRA, indicate one is not trying to claim the CL but one would like to avoid problems.


Cheers

*PS*

I suspect if one wants to be audit proof (or wants to use the CL), one could ask the broker to reverse the "in-kind" contribution, sell for the loss and then contribute the proceeds. Again, my experience is full documentation as well as discussions with CRA helps avoid time consuming questions or audits in the future.


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## Eclectic12 (Oct 20, 2010)

Skye said:


> If I make an In Kind transfer at a loss from my Margin Account to my TFSA how do I report the transaction to CRA ...


I didn't catch on the first read that you haven't done the transfer yet.

This raises the question of why you apparently don't want to sell the stock for a CL that you can use and then contribute the cash to your TFSA?

As long as you wait 30+ days to re-buy the identical stock ... or you find a similar investment you like to buy right away (ex. sold TD for a CL and buy CIBC bank stock in the TFSA) ... the only difference is the two commissions (i.e. sell in the margin account and buy in the TFSA), which the CL is likely worth more than the commissions.

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


Insisting on an "in-kind" transfer is going to forfeit the use of the CL.


Cheers


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