How do you report a Superficial loss correctly? I received a T5008 that shows a small capital gain, but when I enter my ACB it turns out to be a loss.

[seveneyes]

I have imported a T5008 slip from CRA which shows a small capital gain.
This is from a company I own who pays a premium dividend.

The premium dividend is generated using your paid dividends to purchase shares and sell shares to gain 1%.

(i)first, you will receive a Dividend from the company;

(ii)second, you will use the cash from the Dividend to purchase new Shares at a 3% discount to the Average Market Price; and

(iii)third, you will sell the new Shares purchased in exchange for the Premium Dividend™, being for a cash amount equal to 101% of the reinvested Dividend.

In my case I had 500 shares so I received a dividend of $91.25 and a premium dividend of $0.91 which is a capital gain.
The following was available on the company web site.

regular dividend               $0.1825
Weighted Average Share Price*  $14.1484
3% Discounted Share Price      $13.7239

So I bought
6.648985 shares with the dividend @ 13.7239 = 91.25

Then sold
6.648985 @ 13.860762 = 92.16

Premium dividend is then 92.16 – 91.25 = 0.91

The T5008 slip reports
box 16 = 0
box 21 = 0.91
box 20 = 0

my ACB at the time was 25.67 so it appears I have a capital loss but it is a Superficial Loss because of the +/- 30 day rule..

[TurboTaxKim]

TurboTax will not recognize these as Capital Losses because it has no way of knowing that the sale corresponds to an in-kind contribution to a registered account. CRA states that you do not deduct these "superficial losses" when you calculate your income on your tax return. 

When completing your tax return, do not enter this disposal on your Schedule 3, as the loss cannot be claimed.  If you still want to enter the disposal on Schedule 3, you must not show a loss for it. If you have used CRA's AutoFill, you can remove the T5008 slips which have been imported or enter an amount in Box 20 equal to Box 21, resulting in no loss or gain. 

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-re...

[sgauthier1]

So what do we do with these T5008 if it is a superficial loss.  I don't want CRA to think I am being neglegent.  In my case, I transferred from non-registered to my TFSA.  How will CRA know?  I don't want to get audited down the line.

How do i answer these questions:

1. Did you have investment income that is reported on a slip (i.e. T5, T3, T5008, T5013)?

2. Did you buy stocks, bonds, mutual funds, real estate, or other property this year?

3. Did you sell stocks, bonds, mutual funds, real estate, or other property this year?

[sgauthier1]

After 3 hours, i finally got thru to CRA. See responses to my initial questions below:

So what do we do with these T5008 if it is a superficial loss.  I don't want CRA to think I am being neglegent.  In my case, I transferred from non-registered to my TFSA.  How will CRA know?  I don't want to get audited down the line.

CRA says you do not have to record your superficial loss on your taxes.  CRA will not automatically know that you had a superficial loss or that it was transferred to a TFSA.  It is up to YOU to keep records to show that you had a loss, and that it was subsequently transferred to a TFSA.  Keep your records with your taxes.  If they have any questions down the line, they will call you and ask for the documentation.  

How do i answer these questions:

1. Did you have investment income that is reported on a slip (i.e. T5, T3, T5008, T5013)?

    CRA says indicate "no"

2. Did you buy stocks, bonds, mutual funds, real estate, or other property this year?

    CRA says indicate "no"

3. Did you sell stocks, bonds, mutual funds, real estate, or other property this year?

    CRA says indicate "no"

Hope this helps!

[TurboTaxBrenda1]

Thank you for your feedback! 

[ekloewen]

Hello,

So to be clear (I'm just going through some T5008's myself), if any of my T5008 slips fall under the superficial loss category, I can:

1) Leave the t-5008s as they are, but not claim the totals in my Capital Gains summary (schedule 3)

2) Remove those slips from my tax return (which seems dicey?  Is that just me?)

3) Change Box 20 and 21 to match each other, essentially zeroing out the total

Wouldn't option one seem the most pertinent?  I just want to make sure I'm doing my due diligence.

Thank you so much!