Personal Finance

T5008 Statement of Securities Transactions

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  • Apr 9th, 2022 8:34 pm
Newbie
Sep 15, 2018
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T5008 Statement of Securities Transactions

I have account at my bank and I opened investment account with them (Mutual Fund), they told me only when I withdraw the investment I will pay taxes if I have gain.

Now, when I'm trying to file my taxes, I reviewed my CRA account, and I found a bunch of: T5008 slips there, and I was reading that I need to enter that, and determine if its investment or gain. the problem is I never cached the amount, the bank is trading for me, and they advised that I should not cash it now because the market is down.

I see there are some gain in the last year, and if I added that mean I need to pay now taxes for something that I never cashed or I had in my hand, as I have investment term that I can not break with the bank. how this one works? any advise?
31 replies
Deal Addict
Apr 27, 2015
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From what I understand, if didn't sell anything last year, you shouldn't report gain/file T5008
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Deal Guru
Jan 19, 2017
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loudyca wrote: I have account at my bank and I opened investment account with them (Mutual Fund), they told me only when I withdraw the investment I will pay taxes if I have gain.

Now, when I'm trying to file my taxes, I reviewed my CRA account, and I found a bunch of: T5008 slips there, and I was reading that I need to enter that, and determine if its investment or gain. the problem is I never cached the amount, the bank is trading for me, and they advised that I should not cash it now because the market is down.

I see there are some gain in the last year, and if I added that mean I need to pay now taxes for something that I never cashed or I had in my hand, as I have investment term that I can not break with the bank. how this one works? any advise?
You must have some kind of portfolio auto rebalancing the bank is doing for you. I.e. the bank will sell some existing investment & re buy others on your behalf every year. If that is the case. you will have capital gains or losses when they sell every time. You can find out from your bank.
Sr. Member
May 15, 2019
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ml88888888 wrote: You must have some kind of portfolio auto rebalancing the bank is doing for you. I.e. the bank will sell some existing investment & re buy others on your behalf every year. If that is the case. you will have capital gains or losses when they sell every time. You can find out from your bank.
It sounds like one of those Portfolios or as the insiders call them "Fund of Fees".

My wife had 1 because of the advice from the bank. When she filed her T1 that year she realized that there was about 30 minimal capital transactions to account for. The value of the portfolio went up $3,000 but the fees were about $6,000. My advice to her, sell the fund, buy index funds (stock index, bond index) or vanguard etf.
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Sep 14, 2012
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loudyca wrote: I have account at my bank and I opened investment account with them (Mutual Fund), they told me only when I withdraw the investment I will pay taxes if I have gain.

Now, when I'm trying to file my taxes, I reviewed my CRA account, and I found a bunch of: T5008 slips there, and I was reading that I need to enter that, and determine if its investment or gain. the problem is I never cached the amount, the bank is trading for me, and they advised that I should not cash it now because the market is down.

I see there are some gain in the last year, and if I added that mean I need to pay now taxes for something that I never cashed or I had in my hand, as I have investment term that I can not break with the bank. how this one works? any advise?
If you own mutual funds and ETFs, even if you don't sell any units of them, you can still get capital gains/losses because the fund manager will often times buy or sell existing stocks or ETFs within your fund to either purchase something else or to rebalance. As long as they stay within the guidelines of the fund, they can do it.

For example, let's say you are invested in a fund that deals with financial services. When you purchased the fund, the fund thought RBC would do well and had a certain percentage in the fund invested in RBC. However, their numbers don't look good so the fund manager decided to sell some of the RBC holdings in the fund and use that to purchase TD. You still hold that financial services fund and looking at your holding on the surface, nothing has changed (you still own 1000 shares of it) but in fact, you might have had a capital gain/loss because the fund manager decided to sell some of the holdings in RBC to purchase TD.
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Mar 8, 2013
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lmcjipo wrote: If you own mutual funds and ETFs, even if you don't sell any units of them, you can still get capital gains/losses because the fund manager will often times buy or sell existing stocks or ETFs within your fund to either purchase something else or to rebalance. As long as they stay within the guidelines of the fund, they can do it.

For example, let's say you are invested in a fund that deals with financial services. When you purchased the fund, the fund thought RBC would do well and had a certain percentage in the fund invested in RBC. However, their numbers don't look good so the fund manager decided to sell some of the RBC holdings in the fund and use that to purchase TD. You still hold that financial services fund and looking at your holding on the surface, nothing has changed (you still own 1000 shares of it) but in fact, you might have had a capital gain/loss because the fund manager decided to sell some of the holdings in RBC to purchase TD.
Another reason for a capital gain is when a company whose stock is owned in the mutual fund is taken over by another company. However, this and the example you mentioned, would be included the T3 or T5, not a T5008.
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akaManny wrote: Another reason for a capital gain is when a company whose stock is owned in the mutual fund is taken over by another company. However, this and the example you mentioned, would be included the T3 or T5, not a T5008.
Yes. I was just stating that not selling/buying a fund and holding it "indefinitely" doesn't necessarily mean that the taxpayer is immune from declaring capital gains/losses and you are correct that these will show up on a T3 (or possibly T5) and not a T5008 (at least I've never gotten this on a T5008).
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lmcjipo wrote: If you own mutual funds and ETFs, even if you don't sell any units of them, you can still get capital gains/losses because the fund manager will often times buy or sell existing stocks or ETFs within your fund to either purchase something else or to rebalance. As long as they stay within the guidelines of the fund, they can do it.

For example, let's say you are invested in a fund that deals with financial services. When you purchased the fund, the fund thought RBC would do well and had a certain percentage in the fund invested in RBC. However, their numbers don't look good so the fund manager decided to sell some of the RBC holdings in the fund and use that to purchase TD. You still hold that financial services fund and looking at your holding on the surface, nothing has changed (you still own 1000 shares of it) but in fact, you might have had a capital gain/loss because the fund manager decided to sell some of the holdings in RBC to purchase TD.
Transactions internal to the fund that generate capital gains would be indicated in box 21 of the T3.

But OP indicates he/she received T5008 Statement of Securities Transactions slips which indicate investments sold or redeemed.

@loudyca Look at your monthly statements to see if there were sell/buy transactions initiated by your bank on some of your holdings, that would result in taxable transactions on a T5008 slip.

Edit: I see @lmcjipo also addressed the T3 vs T5008 issue in Post #7
Last edited by Deepwater on Mar 9th, 2022 9:33 am, edited 1 time in total.
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Sep 15, 2018
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Thank you all, but I'm wondering how the financial advisor at the bank did not tell me that, he insisted that only when I withdraw then I will pay tax if I made money or loss if the fund was less than the capital. where did he got the knowledge from.
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Dec 11, 2008
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Deepwater wrote: Transactions internal to the fund that generate capital gains would be indicated in box 21 of the T3.

But OP indicates he/she received T5008 Statement of Securities Transactions slips which indicate investments sold or redeemed.

@loudyca Look at your monthly statements to see if there were sell/buy transactions initiated by your bank on some of your holdings, that would result in taxable transactions on a T5008 slip.

Edit: I see @lmcjipo also addressed the T3 vs T5008 issue in Post #7
I started a Questrade advisor last year and first time seeing a T5008. It is run by an account manager who rebalances - like this robot stuff. The amount is minimal which is fine and was automatically populated in WealthSimple Tax from CRA

Having said that I also a non-reg at TD Investorline and I did sell stocks for capital gains; this all was automatically in a T5008 from CRA and also from a paper copy sent to me from TD. So I didn't get a T3 from them.
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Dec 11, 2008
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loudyca wrote: Thank you all, but I'm wondering how the financial advisor at the bank did not tell me that, he insisted that only when I withdraw then I will pay tax if I made money or loss if the fund was less than the capital. where did he got the knowledge from.
To be frank, most financial advisors at a bank aren't worth much. This too is new to me as well.
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Mar 8, 2013
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loudyca wrote: Thank you all, but I'm wondering how the financial advisor at the bank did not tell me that, he insisted that only when I withdraw then I will pay tax if I made money or loss if the fund was less than the capital. where did he got the knowledge from.
"only when I withdraw then I will pay tax" is clearly incorrect, unless he is referring to a withdrawal from an RSP or RIF.
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May 16, 2017
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I'd get a new financial advisor or new bank for investments. The financial advisor may have given a flippant answer assuming this was a registered investment account (RRSP, RIF).

As others have stated, periodic rebalancing (selling & buying) will incur fees as well as potentially capital gains/losses. The investments could also generate dividend income.

I have a employer-sponsored RRSP with Manulife where periodic re-balancing takes place. The advantage of this plan is that there are no fees for re-balancing transactions and no management fees on the investment funds themselves.
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Sep 14, 2012
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loudyca wrote: Thank you all, but I'm wondering how the financial advisor at the bank did not tell me that, he insisted that only when I withdraw then I will pay tax if I made money or loss if the fund was less than the capital. where did he got the knowledge from.
This is clearly wrong since holding the fund (assuming it is in a non-registered account which in your example it is because you wouldn't have gotten the type of tax receipt you received) will still result in possible tax implications since:
1) funds depending on what they invest in will sometimes have dividend/interest generated and whether these are auto-invested or paid out, you'll get a tax receipt for this and need to declare it on your income tax
2) transactions within the fund (such as the fund manager deciding to transfer holdings from let's say Google/GOOGL to Apple/AAPL that you might not be aware of) will generate capital gains/losses which you will also get a tax receipt for and you will need to declare
3) if the fund company decides to cancel/merge the fund with another fund, you "holding" it will automatically have the fund company sell your existing fund to purchase the new fund will be the same as you selling it even if you didn't want to sell it since the fund was replaced and your existing fund no longer exists.
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Sep 15, 2018
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speedyforme wrote: I started a Questrade advisor last year and first time seeing a T5008. It is run by an account manager who rebalances - like this robot stuff. The amount is minimal which is fine and was automatically populated in WealthSimple Tax from CRA

Having said that I also a non-reg at TD Investorline and I did sell stocks for capital gains; this all was automatically in a T5008 from CRA and also from a paper copy sent to me from TD. So I didn't get a T3 from them.
Yes I did try import slips and they all been populated in TurboTax software, so at the end TurboTax advised there is error in the T5005 and I need to indicate each one if investment or capital gain. So do we need to do that as there is option says: skip error. If the slips already with cra, do I still define each slip. I'm confused as it really does not click to me that I'm making money out of this mutual fund. The fund is declining but Still see there is capital gain and it resulted that I need to pay taxes.
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Dec 11, 2008
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loudyca wrote: Yes I did try import slips and they all been populated in TurboTax software, so at the end TurboTax advised there is error in the T5005 and I need to indicate each one if investment or capital gain. So do we need to do that as there is option says: skip error. If the slips already with cra, do I still define each slip. I'm confused as it really does not click to me that I'm making money out of this mutual fund. The fund is declining but Still see there is capital gain and it resulted that I need to pay taxes.
WealthSimple Tax also says I need to declare Capital or Investment. Chances are all of them are Capital. Capital means a sale (Capital Gain) which I believe would be what you have as well. Check your Bank statement because it will indicate what they did. For me WealthSimpole had a tax form for me to download and the form clearly state "Disposition" which is for a sale and proceeds. So it should be Capital.

If you had Dividends from those investments, they should come in a form of a T5 standard.
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speedyforme wrote: I started a Questrade advisor last year and first time seeing a T5008. It is run by an account manager who rebalances - like this robot stuff. The amount is minimal which is fine and was automatically populated in WealthSimple Tax from CRA
Questwealth portfolio?

Having said that I also a non-reg at TD Investorline and I did sell stocks for capital gains; this all was automatically in a T5008 from CRA and also from a paper copy sent to me from TD. So I didn't get a T3 from them.
Canadian mutual funds will issue T3s, and for Canadian ETFs your broker will issue T3s. For stocks your broker will issue T5s, but only if there was taxable income like dividends issued by the company. No T5 needed for a stock that does not pay any taxable distributions.
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Deepwater wrote: Questwealth portfolio?



Canadian mutual funds will issue T3s, and for Canadian ETFs your broker will issue T3s. For stocks your broker will issue T5s, but only if there was taxable income like dividends issued by the company. No T5 needed for a stock that does not pay any taxable distributions.
Yes. I signed up for their RRRSP and Non-reg and just contribute and they auto balance based on the risk options I want. Figured we want need to diversify our stuff since our TFSA and RRSP self-directed are already maxed and our joint non-reg is also self-directed.

Since these ETFs were mainly index stuff; they still paid dividends but I haven't seen any tax forms yet when I log in. The T5008 is there but nothing on Dividends etc. Maybe I still have to wait...
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loudyca wrote: Yes I did try import slips and they all been populated in TurboTax software, so at the end TurboTax advised there is error in the T5005 and I need to indicate each one if investment or capital gain. So do we need to do that as there is option says: skip error. If the slips already with cra, do I still define each slip.
Here is what Wealthsimple Tax says about it:
How do I report the amounts from my T5008 slip?
"Capital or Investment: You’ll also need to indicate if your T5008 slip relates to income that is capital in nature (e.g., shares or mutual funds), or if it relates to income that is investment in nature (e.g., dispositions of mature T-bills)."

Based on your description it is capital. If you don't make a selection or select Income when it is Capital you could pay excess tax.

I'm confused as it really does not click to me that I'm making money out of this mutual fund. The fund is declining but Still see there is capital gain and it resulted that I need to pay taxes.
The MF may have sold a stock at a capital gain part way through the year, which is taxable capital gains shown in Box 21 on your T3. Then later in the year, markets tanked and the fund value went down. It's just how investment funds work.
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speedyforme wrote: Since these ETFs were mainly index stuff; they still paid dividends but I haven't seen any tax forms yet when I log in. The T5008 is there but nothing on Dividends etc. Maybe I still have to wait...
Canadian ETFs and mutual funds get reported on T3 slips. The deadline to issue is March 31.
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