Investing

ETF Special Distributions

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  • Jan 9th, 2015 1:53 am
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[OP]
Sr. Member
Mar 15, 2011
546 posts
178 upvotes
Toronto

ETF Special Distributions

Hello,

I'm a newbie at investing. Just opened a brokerage account for RRSP in March last year and bought 500 shares of the ETF DXM.

I'm reconciling my year end distributions, and am trying to understand this 'special distribution' notice:
http://www.firstasset.com/media/release.php?id=3243

Specifically this:

"With respect to the portion of each Special Distribution paid by the issuance of units, as is standard in the industry, immediately after the issuance of the units, the issued and outstanding capital of the First Asset ETF will be consolidated such that the number of issued and outstanding units of the First Asset ETF does not change."

So does this mean that I'll see the cash portion + regular portion as a dividend paid to me, but the 'unit portion' is built back into the fund such that the number of the units I have don't change? Because I still own 500 units, so its been re-invested back into the fund?

Also if I held this in a regular investing account and they distributed x in cash and y in units, what is reported for tax purposes? Just the x I was paid in cash or x+y?

If this has been covered somewhere before, just point me to the link.

thanks!
1 reply
Deal Addict
Oct 4, 2009
3062 posts
2040 upvotes
Montreal
You'll only see the cash distribution but will get taxed on both. Your ACB will go up based on the reinvested distribution.

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