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).
Thanks for the info and this was confirmed with TDDI on how the Loblaws shares were handled and the "reset" of their ACB.
However, I would not (and did not) ignore the T5008 as there is nothing worse than giving the CRA a reason to "inquire" about a T-slip that was not reported/entered (since they are uploaded to them and can be seen on your CRA "My Account").
I reported the value of Box 20 the same as Box 21 since that is what transpired (i.e. original amount of Loblaws shares disposed of at the ACB as part of the Plan of Arrangement "formula").
Good point. I certainly didn't mean to imply a person should ignore T5008 information in the case of reportable capital gains. And I agree, we don't want to provide reasons for the CRA to question our return.
In my experience the T5008 is a 'work in progress'. For example, a few years ago TDDI was creating a T5008 with every sell order of their HISA mutal fund TDB8150 (it has interest reported on a T5, but never any CG's). Recently they stopped issuing the T5008 for it.
And as I'm sure you know, the T5008 does not typically report the cost or book value for box 20 (it is up to you to know your ACB, complicated by holding the same security in multiple taxable accs, transfers in kind, DRIP's, ROC, etc.).
So I do not use the T5008 slip input screen in Turbotax, nor the auto-download from My Acc.
I do of course still report my relevant security sales on Schedule 3, where the 'Proceeds of Disposition' should match the box 21 proceeds on the T5008 for that particular security.
I suspect that the CRA would like to/may eventually require institutions to issue complete T5008 slips, including cost, and the onus will then be on us to explain any discrepancy in the ACB we report.
Cheers
Additional perspective on some of the items commented on above;
ACB: Other factors to take into consideration in establishing ACB are
i) transaction exchange rate for non-CDN $ securities
ii) Notional (aka phantom) distributions done by some ETFs
iii) TDDI reporting erroneous Book Value in their year-end Tax Package document for securities in which they came into TDDI non-registered account as a transfer-in-kind
T5008: Are still being issued for US$ based HISA (and Money Market Funds) because the foreign exchange rate for the buy & sell transactions could result in capital gain or loss.
Not Using CRA Autofill for T-slips:
i) US or Euro denominated T-slips will be downloaded in the foreign currency and need to be manually adjusted anyway
ii) if a single buy/sell securities transaction is completed with multiple partial fills there is a T5008 for each partial fill, so depending on your activity it will hit the TurboTax limit for the T5008 entry panel
iii) If Financial Institution makes a mistake one could inadvertently "import" that error. This was a very real case where a FI issued a duplicate T5 and both versions were on many peoples My Account for 10 to 14 days. Could/may have affected hundreds of people in that time period if they had "autofilled" without scrutinizing.