Personal Finance

How to claim GOOG split devidend

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  • Apr 7th, 2015 1:24 pm
[OP]
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Jan 31, 2008
72 posts
16 upvotes

How to claim GOOG split devidend

Let me start that I "hate" google for making this unnecessarily complicated :-) why couldn't they just do a normal split?!

So I had 10 GOOG later split into 10 class A and 10 class C shares with total value unchanged. However I now received my T5 in which the new class C shares is treated as dividend as what google did was a "in kind dividend".

If I claim my tax by T5's numbers, I will be paying tax for a "capital gain" that I never had! How do I make this right? What forms I need to download for adjustment? There are a few articles/discussions on the Net for this matter, but none talked exactly which steps/forms I need to make this right.

Thanks!
5 replies
[OP]
Newbie
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Jan 31, 2008
72 posts
16 upvotes
Sorry for late response. I did sell them last year. I may be using the wrong term by referring "stock dividend" as "capital gain" - I am not an expert on this - I have to pay tax either way, correct? As long as I have to pay tax on "profit" that I didn't have, it's unfair and I want to know if there is a way to legally avoid it.
[OP]
Newbie
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Jan 31, 2008
72 posts
16 upvotes
Any takers? I called CRA, the RSP gave me advise about a normal stock split, which doesn't apply to GOOG's split at all - the new share was issued as stock dividend.
Banned
Jul 19, 2011
48 posts
11 upvotes
Toronto
Divide your cost basis by 2 and calculate based on that?

If you bought Google shares at $1000 pre split and today its $555...

then you made $55 profit per share
[OP]
Newbie
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Jan 31, 2008
72 posts
16 upvotes
Let's make it simpler. Supposed that before split it was $1000X10shares, after "split" it's $500X10(class A) + $500X10(Class C); Let's also suppose that I sold them all @500, then I didn't make any money out of it. If I use new cost base($500) for all 20 shares, my net gain is zero (that's what happened in real life), but I still end up having to pay tax for the so-called "dividend"($5000) because it's now appear on T5. I am thinking since the 10 new shares are treated as dividend, then my cost base should still be $1000 for class A, then when I sold it for $500, I took a $5000 loss, which would offset the so-called diviend
[OP]
Newbie
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Jan 31, 2008
72 posts
16 upvotes
Just an update for maybe a few other people who may be affected/interested, my brokerage (questrade) finally change their T5 reporting. Wasted a lot of my time to persuade them at the beginning that they were not doing it right.

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