Personal Finance

Income Tax Question: Capital Gains, ACB and Refiling

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  • Apr 20th, 2012 8:38 am
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Sr. Member
Aug 12, 2005
576 posts
10 upvotes
Toronto

Income Tax Question: Capital Gains, ACB and Refiling

Long story short, the exchange rates used to calculate ACB and their consequent capital gains were the Bank of Canada "Average Rates" for the year in 2008 & 2009 tax filings. But in 2010, I realized this was incorrect and recalculated the ACBs & capital gains for previous years and began to use the actual transacted FX rates and have since filed for 2010 and 2011 using the recalculated ACB's as normal.

The only issue is that I put off the refiling of my taxes for 2008 & 2009 -- My 2008 refile tax impact would be a wash due to limited sales (mostly purchases). However, for 2009 I would expect a significant refund since the average tax rate used previously were fairly different from the actual transacted fx rates.

Now I understand I have quite a complex issue on my hands, but it'd be helpful if anyone can answer the following questions:
1. When refiling for 2009 line 127 (capital gains), what comments should I note for the change?
2. By refiling, all of my capital gains calculations would be consistent in their exchange rate treatment -- But would the CRA penalize me for choosing to refile with what is seemingly a more advantageous exchange rate treatment? (actual rate instead of average rate)

Thanks for all your help.
1 reply
Deal Addict
Sep 30, 2008
1277 posts
311 upvotes
you have two options - filing an amended tax returns for the back yrs, or writing a letter to the cra explaining the changes.

1) just change the figure in the amended return, or say that the actual rate is used in the letter

2) cra wont penalise u as the actual rate is the acceptable or correct rate

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