Investing

Interactive Brokers - Activity Report errors

  • Last Updated:
  • Oct 12th, 2018 6:20 am
[OP]
Sr. Member
Jan 5, 2006
936 posts
61 upvotes
Mississauga

Interactive Brokers - Activity Report errors

Hi RFD,

I'm noticing inconsistencies with my IB activity reports in terms of Realized profits, and I foresee a lot of headache at tax time. What kind of reports do you all use for your tax reporting?

My specific issue is that IB doesn't to seem to apply weighting for calculating adjusted cost basis:

Purchase 25 shares of XYZ @ $7.74
Purchase 75 Shares of XYZ @ $6.25
Sell 50 shares of XYZ @ $6.78.

I calculate my ACB to be $6.64, yet IB uses $6.99 for profit and loss reporting, which is exactly ($7.74 + $6.25)/2

Any helpful comments would be appreciated. Thanks in advance.
The early bird gets the worm, but the second mouse gets the cheese.

Winnings:
2008 - 591mL Coke drink
27 replies
Sr. Member
Apr 9, 2012
566 posts
149 upvotes
Markham
Interesting.... I never looked at that. I would be interested in the outcome as well.
Deal Addict
Jun 27, 2007
4021 posts
909 upvotes
MrMom wrote:
Feb 7th, 2018 10:19 am
FIFO (25X7.74 + 25X6.25)/50 =$6.995
there are 75 shares at 6.25 and 25 shares at 7.74
I get 6.62
(25 x 7.74 + 75 x 6.25) / 100
It's easy to grin when your ship comes in and you've got the stock market beat.
But the man worthwhile is the man who can smile when his shorts are too tight in the seat 😃
[OP]
Sr. Member
Jan 5, 2006
936 posts
61 upvotes
Mississauga
MrMom wrote:
Feb 7th, 2018 10:19 am
FIFO (25X7.74 + 25X6.25)/50 =$6.995

Assumed zero transaction costs.

Maybe this site can help you, https://www.adjustedcostbase.ca/blog/ho ... tal-gains/
Thanks MrMom, I had no idea they were using FIFO. I was under the impression that they couldn't do that for Canadians given the CRA rules. I guess I'll have to run my own reports to calculate ACB if there are no settings for that in IB.
The early bird gets the worm, but the second mouse gets the cheese.

Winnings:
2008 - 591mL Coke drink
Deal Addict
Aug 17, 2008
1634 posts
827 upvotes
SamInfinity wrote:
Feb 7th, 2018 10:42 am
Thanks MrMom, I had no idea they were using FIFO. I was under the impression that they couldn't do that for Canadians given the CRA rules. I guess I'll have to run my own reports to calculate ACB if there are no settings for that in IB.
Give IB a call or hit them up on a chat to verify their methodology is your best course of action.

CRA example agrees with your calc. https://www.canada.ca/en/revenue-agency ... perty.html
Member
Apr 22, 2014
499 posts
239 upvotes
Edmonton, AB
IB will provide you with a T5008 that includes ACB. But I've always said, it's anyone's guess whether their ACB is correct and you should track it yourself.
[OP]
Sr. Member
Jan 5, 2006
936 posts
61 upvotes
Mississauga
philland wrote:
Feb 7th, 2018 2:03 pm
IB will provide you with a T5008 that includes ACB. But I've always said, it's anyone's guess whether their ACB is correct and you should track it yourself.
Thanks Philland and all posters. I will await my T-5008 and compare it to my own spreadsheet. Will Update towards April
The early bird gets the worm, but the second mouse gets the cheese.

Winnings:
2008 - 591mL Coke drink
Sr. Member
Apr 9, 2012
566 posts
149 upvotes
Markham
I never really track my own and used what IB provided.

If the CRA audits, isn't providing the T-5008 and activity report from IB sufficient? Would CRA not take that as back up documents?
Deal Addict
User avatar
Apr 23, 2009
1515 posts
438 upvotes
Why would anyone use their broker's reports for ACB? In US, FIFO is an acceptable method for ACB calculations but not here in Canada. I use activity reports only for interest expenses, trade confirmations and dividends. I calculate my own ACB (across different accounts), capital gains and losses.
Deal Addict
User avatar
Apr 23, 2009
1515 posts
438 upvotes
How would CRA know your ACB? You have to provide sufficient support for your ACB calculation in whatever form, shape and manner necessary.
atang810 wrote:
Feb 7th, 2018 2:31 pm
I never really track my own and used what IB provided.

If the CRA audits, isn't providing the T-5008 and activity report from IB sufficient? Would CRA not take that as back up documents?
Sr. Member
Apr 9, 2012
566 posts
149 upvotes
Markham
ruchir wrote:
Feb 7th, 2018 2:37 pm
How would CRA know your ACB? You have to provide sufficient support for your ACB calculation in whatever form, shape and manner necessary.
Interactive Brokers provides this. They have an average cost for you. Why wouldn't you use your brokers report?
Deal Addict
User avatar
Apr 23, 2009
1515 posts
438 upvotes
Because I have brokerage accounts with IB, VB, QT and TD so my ACB is a combination of positions held in these accounts. I do use IB reports but only for proceeds / costs. Also, some these positions are held in joint accounts for income splitting so I have to properly allocate proceeds / costs to have an accurate ABC amount. Unless you are always going to have only one broker i.e. never transferring accounts from one broker to another, you will invariably mess up your ACB.

For example, when transferring accounts some broker will use the market price on the day of transfer as your ACB by default. I cannot see how your broker's ACB always be accurate.

atang810 wrote:
Feb 7th, 2018 2:42 pm
Interactive Brokers provides this. They have an average cost for you. Why wouldn't you use your brokers report?
Last edited by ruchir on Feb 7th, 2018 2:52 pm, edited 1 time in total.
Sr. Member
Apr 9, 2012
566 posts
149 upvotes
Markham
ruchir wrote:
Feb 7th, 2018 2:52 pm
Because I have brokerage accounts with IB, VB, QT and TD so my ACB is a combination of positions held in these accounts. I do use IB reports but only for proceeds / costs.
?? is there a reason why you are using all these different brokers to trade effectively the same stocks?

Well, I only use IB, so I think it's pretty efficient if I can just provide the activity report which includes the ACB & realized gains.
Deal Addict
User avatar
Apr 23, 2009
1515 posts
438 upvotes
just edited my above post......that answers your question.

I usually buy and hold for long term so over the years I have accumulated positions in different accounts as dividends became available. Often end up buying the same stocks in different accounts if the stock is on sale.....

For example, these days I am buying ENB, CNR, and BAM from the dividends I receive. I don't do automatic DRIP.

atang810 wrote:
Feb 7th, 2018 2:55 pm
?? is there a reason why you are using all these different brokers to trade effectively the same stocks?

Well, I only use IB, so I think it's pretty efficient if I can just provide the activity report which includes the ACB & realized gains.

Top