Investing

Interactive Brokers - Activity Report errors

  • Last Updated:
  • Oct 12th, 2018 6:20 am
Deal Addict
Oct 6, 2015
1302 posts
684 upvotes
IB actually tracks what you paid for an individual share, and accordingly, does *not* average the prices when it calculates the gain on the sale of a share. It uses the actual difference between the buying price of the shares, and the selling price.

If you have IB generate an expanded report, you can actually see the purchase price of every share and even forex instrument in your portfolio.
Deal Addict
Feb 4, 2015
3508 posts
787 upvotes
Canada, Eh!!
Believe in Canada, unlike US, you need to use average cost.

Don't most of these activity/trading statements say it is not for tax purposes or similar disclaimer?

Perhaps IB, being US company, is using the convention there [fifo, or choose lots that was available until recent tax reform]
Newbie
Mar 19, 2018
3 posts
I called Interactive Brokers about this ACB (Adjusted Cost Base) or IFIO (First- In First- Out) issue for my activity statement and T5008. At first they said Canadian account should use FIFO. After I told them CRA request ACB, then they said you could ask your accountant to make calculation with ACB but they only provide FIFO calculation to Canadian account. I heard IB provides options of ACB or FIFO to US customers. I just don’t understand why they only provide a wrong way tax statement to Canadian customers but actually they have the ability to do either method.
For my situation this year there could be a few tens of thousand dollars difference and I have to pay much more tax at front. Also on their trading platform Trader Workstation, average price is used for trading. ACB seems more reasonable and easy to use.
What I can do? Any suggestion?
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User avatar
Apr 23, 2009
1426 posts
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Yanghuan wrote:
Mar 20th, 2018 6:54 pm
I called Interactive Brokers about this ACB (Adjusted Cost Base) or IFIO (First- In First- Out) issue for my activity statement and T5008. At first they said Canadian account should use FIFO. After I told them CRA request ACB, then they said you could ask your accountant to make calculation with ACB but they only provide FIFO calculation to Canadian account. I heard IB provides options of ACB or FIFO to US customers. I just don’t understand why they only provide a wrong way tax statement to Canadian customers but actually they have the ability to do either method.
For my situation this year there could be a few tens of thousand dollars difference and I have to pay much more tax at front. Also on their trading platform Trader Workstation, average price is used for trading. ACB seems more reasonable and easy to use.
What I can do? Any suggestion?
Why are you relying on IB for your ACB? Brokers in Canada are not required to track your ACB. It is impossible given the CRA rules that requires you to calculate ACB across all accounts.

Just use trade confirmation report and calculate your own ACB.
Newbie
Mar 19, 2018
3 posts
Thank you very much for your suggestion. I am thinking to make my record with ACB by myself. But one thing I still have question is IB release T5008 to me and also to CRA base on FIFO. After I summit my tax return to CRA, they will see different capital gain numbers. This may create some unnecessary troubles? The T5008 which IB release does not mention it’s base on FIFO, and it seems nowhere I can explain why my number is different to T5008 when electronic net filing for my tax return. And I also don’t understand why IB insists giving Canadian customer some number which is useless to them.
Newbie
Mar 19, 2018
3 posts
I guess when IB releases trading activity statement, they may have freedom to use whatever the method (FIFO or ACB) to create the number. But T5008 is a Canadian tax slip and RCA clearly request the cost number should be filled as ACB. IB must follow the Canadian rule to make T5008. So if IB releases T5008 with FIFO, they are just doing very wrong thing and it cannot be acceptable. And for securities transaction, brokerage firms have responsibility to release proper T5008.
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Apr 23, 2009
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Yanghuan wrote:
Mar 21st, 2018 1:49 pm
I guess when IB releases trading activity statement, they may have freedom to use whatever the method (FIFO or ACB) to create the number. But T5008 is a Canadian tax slip and RCA clearly request the cost number should be filled as ACB. IB must follow the Canadian rule to make T5008. So if IB releases T5008 with FIFO, they are just doing very wrong thing and it cannot be acceptable. And for securities transaction, brokerage firms have responsibility to release proper T5008.

Assume for a second that IB correctly uses the Canadian method of ACB and accurately report on the T5008.

They still wouldn’t know your ACB if you hold the same stock in VB, QT or TD account.

CRA is definitely not going to add up all T5008 from different brokers and do an ACB for you.

Put it simply - you are obligated to calculate and support your ACB. I know it is painful but I stopped fighting it years ago.

Set up a nice system or spreadsheet to track your ACB.
Deal Addict
Jul 30, 2015
1570 posts
678 upvotes
Toronto, ON
ruchir wrote:
Mar 21st, 2018 3:48 pm
Assume for a second that IB correctly uses the Canadian method of ACB and accurately report on the T5008.

They still wouldn’t know your ACB if you hold the same stock in VB, QT or TD account.

CRA is definitely not going to add up all T5008 from different brokers and do an ACB for you.

Put it simply - you are obligated to calculate and support your ACB. I know it is painful but I stopped fighting it years ago.

Set up a nice system or spreadsheet to track your ACB.
Just curious - why do you use so many brokers?
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Apr 23, 2009
1426 posts
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canoek wrote:
Mar 21st, 2018 4:39 pm
Just curious - why do you use so many brokers?
Kids are with VB for penny commission
Wife with QT for ETF's
And I am with IB for cheap margin
And only TD offers RDSP brokerage in Canada
Deal Addict
Jul 30, 2015
1570 posts
678 upvotes
Toronto, ON
ruchir wrote:
Mar 22nd, 2018 12:43 am
Kids are with VB for penny commission
Wife with QT for ETF's
And I am with IB for cheap margin
And only TD offers RDSP brokerage in Canada
So you can still add up the portofolio as part of your taxes? ALso, if you don't mind, how cheap is VB? I thought of switching to it for lower fees (and being a better platform than QT), but the website fee structure wasn't really clear to me.
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User avatar
Apr 23, 2009
1426 posts
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canoek wrote:
Mar 22nd, 2018 6:03 am
So you can still add up the portofolio as part of your taxes? ALso, if you don't mind, how cheap is VB? I thought of switching to it for lower fees (and being a better platform than QT), but the website fee structure wasn't really clear to me.
I use Quicken to track portfolios and ACB by security. Yes, VB interface sucks and they no longer have penny commissions except that we still have it. I don't know what current commision structure is but I think it is similar to QT. I could be wrong though. Best thing to do is to call them up and ask.

We are buy and hold type of investors so we really don't need sexy trading platforms or real time quotes.

For us, VB is still the cheapest @ 1 cent per share. I mainly use VB as educational tool where kids decide what they want to buy (so I buy odd 1 or 2 shares) once in a while. Believe it or not sometimes kids have more insights on the latest trends than adults.
Newbie
Nov 19, 2017
43 posts
14 upvotes
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. 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.

ruchir wrote:
Mar 20th, 2018 10:18 pm

Why are you relying on IB for your ACB? Brokers in Canada are not required to track your ACB. It is impossible given the CRA rules that requires you to calculate ACB across all accounts.

Just use trade confirmation report and calculate your own ACB.
ruchir wrote:
Mar 21st, 2018 3:48 pm
Assume for a second that IB correctly uses the Canadian method of ACB and accurately report on the T5008.

They still wouldn’t know your ACB if you hold the same stock in VB, QT or TD account.

CRA is definitely not going to add up all T5008 from different brokers and do an ACB for you.

Put it simply - you are obligated to calculate and support your ACB. I know it is painful but I stopped fighting it years ago.

Set up a nice system or spreadsheet to track your ACB.
Bringing this old thing back:
1. I only use IB and don't have any other brokerages, and buy/sell shares on my account, and collect dividends.
2. Can I just send the T5008 and T5 and not have to worry about these ACB issues?
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Apr 23, 2009
1426 posts
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organeer wrote:
Oct 12th, 2018 2:33 am
Bringing this old thing back:
1. I only use IB and don't have any other brokerages, and buy/sell shares on my account, and collect dividends.
2. Can I just send the T5008 and T5 and not have to worry about these ACB issues?
Perhaps not! I don’t know if IB follows FIFO method which is Americans must use. In Canada, we use ACB. I will have to check how IB does it.

Calculating ACB is ver easy.

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