Studio Tax T5008 question

Depends if the investment reported is an equity or a bond. Stocks would be considered capital and bonds would be considered investment.

If answer is investment income, StudioTax will process via schedule 4 and post to T1 line 121.
If answer is capital gain, StudioTax will process via schedule 3 and post to T1 line 127.
If unanswered, I believe StudioTax default to capital gain (or loss) tax treatment.

Capital gains are taxed at 50% and incomes are taxed 100%

If it is proceed from selling publicly traded stock held over a reasonable length of time, then IMO it should be reported as capital gain (or loss).

Just make sure you fill in the acquisition cost, or you are going to be hit with a whole lot more tax than necessary. Tax is owed only on the difference between proceeds of sale and cost of acquisition, but most T5008 issuers will not fill in the cost of acquisition because they don't necessarily know and they don't want to take responsibility. StudioTax will fill in zero as the cost of acquisition with no warning unless you tell it otherwise. So if you sold $10,000 worth of an investment that you bought for $8000, you will be charged tax on $10,000 instead of $2000 unless you fill in the $8000 cost of acquisition yourself.

Exp315 wrote: ↑ Just make sure you fill in the acquisition cost, or you are going to be hit with a whole lot more tax than necessary. Tax is owed only on the difference between proceeds of sale and cost of acquisition, but most T5008 issuers will not fill in the cost of acquisition because they don't necessarily know and they don't want to take responsibility. StudioTax will fill in zero as the cost of acquisition with no warning unless you tell it otherwise. So if you sold $10,000 worth of an investment that you bought for $8000, you will be charged tax on $10,000 instead of $2000 unless you fill in the $8000 cost of acquisition yourself.

I believe it is Line 20 in T5008 (Cost or book value)?

tor1deal wrote: ↑ I believe it is Line 20 in T5008 (Cost or book value)?

Correct.

Most brokers will show you a blended acquisition cost for any investment in your portfolio, but they leave it up to you to fill that in on the T5008, partly because they only know about what happened while they were managing your account. That's probably the full story in most cases, but not necessarily in all cases.

It's a blended cost because although you may have acquired the investment in multiple steps at different prices (e.g., shares of a stock or mutual fund), there's no way to distinguish which particular shares you are selling because they are all the same. So the number is the total acquisition cost you paid over the number of shares you have now, all considered to have the same average acquisition cost.

tor1deal wrote: ↑ I got T5008 from "WealthSimple Trade" for 2018. I am using Studio Tax to fill taxes. There's a column in studio tax to specify if it is a Capital Gain or Investment Income, whereas it's not specified in WealthSimple T5008 slip. What should I answer to that question? Attached is Studio Tax T5008 form. Thanks.

Based on your T5008 numbers, this is a capital Loss. you sold 5 shares of Kelso technologies for $.64 a share, so proceeds = 3.20. Your cost base is shown as $3.34. If using Wealthsimple trade for both sides of the transaction then your "outlays and expenses" is $0.00 and therefore overall a $.14 position loss


As for Studio Tax, you would select "Capital gains" in the field, as this was an equity transaction.

I don't think you have to report the T5008 as printed, correct? Most people will want to manually enter their capital gains and losses in the appropriate schedule, adjusting their cost base for things like return of capital, reinvested distributions or dividends, and capital gains distributions, if applicable.

Cheers,
Doug

dmehus wrote: ↑ I don't think you have to report the T5008 as printed, correct? Most people will want to manually enter their capital gains and losses in the appropriate schedule, adjusting their cost base for things like return of capital, reinvested distributions or dividends, and capital gains distributions, if applicable.

Cheers,
Doug

I guess filling T5008 in the tax software, appropriate schedules will automatically gets filled by the software. Since T5008 will have necessary columns like caplital gains/ cost or book value, etc.

tor1deal wrote: ↑ I guess filling T5008 in the tax software, appropriate schedules will automatically gets filled by the software. Since T5008 will have necessary columns like caplital gains/ cost or book value, etc.

The T5008s are tricky, especially as they are pretty new. Last year I had two that had wrong information on them and had to adjust accordingly. My folks blindly trusted the T5008 they had for a GIC that came due, they ended up paying cap gains on it (on top of the T5 income) and luckily i noticed it by fluke 6 months later and they were able to get the money back from CRA. Was a couple of grand due to form errors/missing values and lack of understanding. So overall Check the numbers and know what is being calculated and whether it makes sense, trusting the software and form providers could end up costing you in a big way.

you can pretty much ignore T5008 if you are properly tracking ACB. The purpose of T5008 is for CRA to know what you sold and at what price. It should not be relied upon for ACB.

ruchir wrote: ↑ you can pretty much ignore T5008 if you are properly tracking ACB. The purpose of T5008 is for CRA to know what you sold and at what price. It should not be relied upon for ACB.

Does this also apply to Potash merger with Agrium resulting in Nutrien? I got a T5008 slip showing the deposition of POT when it got converted to NTR. I didn't sell!

pipolchap wrote: ↑ Does this also apply to Potash merger with Agrium resulting in Nutrien? I got a T5008 slip showing the deposition of POT when it got converted to NTR. I didn't sell!

If the merger resulted in a change that was considered a deemed disposition, then it is a taxable event. You have to report your gains/losses in the year of the event. You can essentially ignore the T5008 if you are tracking everything properly, but that doesn't mean you can ignore the taxable event.

I believe Agrium and Potash was a tax-free merger of relative equals, so you can probably ignore the T5008, but check with Nutrien or the transfer agent to be sure.

Bottom line: T5008s are not like the T5s and T3 whereby CRA will automatically or manually adjust your reported values to match the filed T5008. If you have been properly tracking your ACB, thru AdjustedCostBase.ca or elsewhere, you can use those calculations and they will generally not question it unless the numbers were way off.

Cheers,
Doug

You have to report the cash part and not the stock part, report the stock part only when you sell it.

nmirza wrote: ↑ Sorry about bringing this old thread to live. I've a related question about investment in USD. I bought a security that bought by another company that give us their security + some cash but in my account, it is looking like we sold the old ones and bought the new one. Would that be reported like that in the taxes?

Also how do I report the cash that I've got for this ?

Are you sure the old shares were sold, not exchanged for the new shares? ask the brokerage.

nmirza wrote: ↑ Those were exchanged but the T5008 the bank sent us is showing old ones are sold and new ones bought. If I put the transactions like that, there would be capital gain that basically never took place during this transaction.

what are the old stock name & the new stock name?