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New Member
posted Apr 30, 2020 1:21:04 PM

I have donated shares. Why are my capital gains being recorded as income when 100% of gains are going to charity?

1 8 3428
8 Replies
Level 1
May 4, 2020 7:13:57 PM

I am having the same problem. I have called in to Support several times and they said it's a known problem in turbotax that would be fixed by May 1st, but it is still not fixed. I'm thinking of switching to the downloadable version of turbotax instead. Of course, I would have to redo everything, and there's no guarantee it would fix the problem. I may just ask turbotax for a refund and use some other software.

Level 1
May 4, 2020 7:27:23 PM

By the way, the problem is that the program is erroneously recording the value in line 1 column 7 (Gain eligible for 0% inclusion rate) of form T1170 and putting it in line 13200 of Schedule 3.

 

Whereas at the bottom of form T1170, it clearly says: "Note: Include the amount from line 1 of column 8 in the total on line 13200 of Schedule 3, and include the amount from line 2 of column 8 in the total on line 15300 of Schedule 3."

 

In my case, I have no amounts in line 1 column 8, only in line 1 column 7. But the value from column 8 is what is appearing on line 13200 of sched 3.

New Member
May 4, 2020 7:27:54 PM

A solution that worked to erase the capital gains from income. If you enter the donated capital gains as a T5008 slip and also in the Investment Profile, the income will be counted twice. I deleted the T5008 entries but maintained the entries in the Capital Gains Profile section.

Level 1
May 4, 2020 7:29:14 PM

Oops, sorry. In my last reply I said "In my case, I have no amounts in line 1 column 8, only in line 1 column 7. But the value from column 8 is what is appearing on line 13200 of sched 3."

 

But I meant: "In my case, I have no amounts in line 1 column 8, only in line 1 column 7. And the value from column 7 is what is appearing on line 13200 of sched 3."

Level 1
May 4, 2020 7:31:36 PM

Thanks wesslnj. RIght, but will the CRA ding us if they have a copy of the T5008 but notice that we did not record the values from it?

Level 1
May 4, 2020 7:38:47 PM

I gave that a try and you are right. It seems to work. Thanks for your solutions, I can finally file.

Returning Member
Feb 10, 2021 12:59:37 PM

Previous complaint re T1170 withdrawn.  Line 1 does compute correctly between boxes 6 and 7.

Intuit Alumni
Feb 11, 2021 11:03:32 AM

To donate shares and not pay taxes on the capital gain, you have to transfer the shares to charity and not sell the securities yourself, you have to transfer the ownership to:

  • the right to receive dividends from the share

  • the right to receive amounts on the liquidation of the corporation

  • the right to exercise the votes attached to the share

In this case, you no longer own the shares. Then the charity will issue you a donation receipt where you report it as a non-cash gift.

 

On the other hand, if you sold your securities yourself and donated the proceeds, you will have to report it as cap-gain. Then report the amount you donated separately under charitable donations.

 

Check this link on donating securities:

https://www.canada.ca/en/revenue-agency/services/charities-giving/charities/operating-a-registered-charity/receiving-gifts/donation-shares.html

 

I hope this was helpful