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Email this12:45 pm
March 18, 2024
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I made a keying error while investing last year. Instead of buying shares in one company, I selected the one above it in my investment account and generated a trade worth a substantial sum. I called the broker but it was too late to reverse the trade. He advised me to sell all the shares immediately. The error meant I took a loss between the total purchase price and the sale price.
I now have the T5008s and need to file with CRA. As I already held shares in the company which I mistakenly traded, the ACB on the T5008s show a substantial gain. The shares were purchased and sold on the same day and before the settlement date. I'm concerned about the 'superficial loss' (30 day) rule.
Any advice?
12:52 pm
April 6, 2013
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Superficial loss rule is moot if one doesn't have a capital loss and has a capital gain instead.
There's no superficial gain rule. CRA accepts the reported capital gain without issue should one sell, realize a capital gain, and buy the shares back within 30 days!
1:13 pm
March 18, 2024
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Thanks Norman!
I understand that. Maybe, I should have excluded the piece about the Bank's ACB. The trade created a loss. I know a standard ACB calculation should include all shares purchased in the past, but I think this one would be an exception.
1:19 pm
April 27, 2017
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I understand that the trade technically created a loss on the day as you sold for less than you bought on that day.
However your profit/loss in the eyes of CRA should be based on your ACB which would account for the cost of shares bought prior to that day. And in your own words, you made a profit; just not as large as it would have been had you not bought more shares of this company on the same day.
You calculate your capital gains normally using your ACB for all preceding purchases of this stock and you pay capital gains. No “artificial loss” to be concerned about. There is no exception.
5:16 pm
October 27, 2013
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gold said
I understand that. Maybe, I should have excluded the piece about the Bank's ACB. The trade created a loss. I know a standard ACB calculation should include all shares purchased in the past, but I think this one would be an exception.
It is not an exception as mentioned. You bought one day, thus averaging in your ACB with your prior holdings and then sold some units the next day for specific proceeds for units sold. You will need to take your lumps on this one.
8:11 am
January 25, 2024
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Where do you report 'capital loss' shown in T5008?
9:07 am
October 27, 2013
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CAD said
Where do you report 'capital loss' shown in T5008?
It goes on Schedule 3 where one enters the appropriate data for acquisition cost and date. and disposition proceeds and date, description and number of shares, etc. The software calculates (and summarizes) the cap gains or losses, and transfers 50% of that number (inclusion rate) on to page 1 of the T1 tax return.
Each tax software package will have a different way of entering data.
10:52 am
January 25, 2024
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Much appreciated @AltaRed!!!
I will see how TurboTax is handling that.
11:07 am
April 6, 2013
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With some tax software, like StudioTax, one can enter the transactions from a T5008 (Statement of Securities Transactions) and indicate whether each gain is capital gain or investment income.
The software will then update Schedule 3 with the capital gains and line 12100 (Interest & other investment income) with the investment income.
11:17 am
April 6, 2013
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AltaRed said
It is not an exception as mentioned. You bought one day, thus averaging in your ACB with your prior holdings and then sold some units the next day for specific proceeds for units sold. You will need to take your lumps on this one.
I agree. One does not have the choice in Canada to use last-in-first-out accounting for the cost of capital property. The prescribed accounting is average accounting.
It doesn't matter that the aquisition was in error. Once the buy order filled, one had made a legally binding purchase from some anonymous sellers. Once the subsequent sell order filled, one had made a legally binding sale to some anonymous buyers.
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