Received a T5008 from TD Waterhouse/Direct Investing for the 2018 tax deferred spin-off by Loblaws resulting in receiving some George Weston Ltd shares.
Box 16 is the number of shares of Loblaws.
Box 21 (The Proceeds of Disposition) in this case was the Average Cost Base (ACB) of those Loblaws shares before the spin off. It is not (and should not be in this case) the market value of the Loblaws shares on the transaction date.
However no shares of Loblaws were ever sold or disposed of and no money ever received (just received the shares of George Weston Ltd, tax deferred as per the Plan of Arrangement).
According to the plan, the ACB of Loblaws goes down by the same amount that the ACB of GWL shares were acquired (those numbers are reflected in monthly statements and annual trading summaries provided by TD).
Has anyone else received T5008 for this or similar situation and how to handle in T5008 entry panel? Any special notations to enter to satisfy CRA?
My inclination is to report in Box 20 the same amount as Box 21 (therefore no capital gain/loss would result) and wait to see if CRA inquires. Unless there is a special code to enter in any of the other boxes to signify that this is tax deferred and avoid an unecessary (time consuming) inquiry.
You can ignore the T5008.
Look on your November TDDI statement, you should see a disposition entry for all of the L shares you owned at their current book value (BV). You didn't actually sell them, but this is what generated a T5008.
You will also see an entry for the (re)acquistion of these same L shares at a BV that is 80.1% of the above. This is how they 'reset' the BV of your existing L shares.
You will also see an entry for the new WN shares. The number will be 0.135 WN shares for every L share you owned, and the BV of these new WN shares will be 19.9% of the orginal L shares.
So the 'reset' L and WN shares have a combined BV that is 100% of your earlier L shares. If you sell either your L or WN shares in the future, this new BV should be the basis of your adjusted cost base (the ACB/share is the BV/#shares).
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