Where do I report the loss on a short sale of stocks?

[b-kiz]

CRA says the loss on a short sale is to be reported on the income account, yet I cannot enter a negative number on your "Investment and Other Income" line. Thanks

[b-kiz]

Neither of the answers below is correct. Gains and losses from short selling stock is not reported by a T5 or a T3 slip. CRA interpretation bulletins say that gains or losses from short selling securities are to be reported on the income account, not the capital gains account. Therefore the gains or losses from short selling stocks should be reported on Line 121 "Interest and Other Investment Income". However in the case of a loss due to short selling, Turbotax does not let me enter a negative number on line 121. Please advise further. Thank you

[Martine-TurboTax]

Please note that your entry should be on line 221, this amount should be a positive amount that will reduce your income which  will reflect on your T1 as well as schedule 4.

[b-kiz]

@Martine@TurboTax I spoke with CRA agent 01825PRA today who advised me that the loss from a short-sale of securities should be reported on Line 130 as "Other Income". This is confirmed by CRA Interpretation Bulletin IT-479R #18 which sales the gain or loss from a short sale is considered to be on the income account.
However TurboTax does not let me enter a negative number on the Other Income page, for Line 130. Please advise how to enter this. The CRA agent confirmed that reporting the loss will be disallowed under Line 121 or Line 221. Thank you

[b-kiz]

@Martine@TurboTax by your silence I take it that TurboTax is unable to meet my needs? Please let me know either way so that I can get on with filing a paper report if necessary. Thank you

[Martine-TurboTax]

Your entries as I mentioned earlier should reflect  on schedule 4 however if this isn’t working kindly call an agent there maybe an issue that we can take a further look.

Please call us by clicking the following link to the Contact Us page. Then complete the required information. A phone number will appear, along with your incident ID. Call the number. This will ensure that an appropriate agent is assigned to your query:
https://support.turbotax.intuit.ca/contact/

An Agent is standing by

Martine@TurboTax

[bechard04]

Did you ever figure this out? I need to know where to report my loss from shorting stocks

[Martine-TurboTax · Accepted solution]

Good afternoon

Please click on this link it will give you some in site on how to proceed with your loss and how to report it.

https://turbotax.community.intuit.ca/questions/1190196-t5-statement-of-investment-income

https://turbotax.community.intuit.ca/questions/1189828-t3-statement-of-trust-income-allocations-and-...

[b-kiz]

@Martine@TurboTax Neither of the answers here are correct. Gains and losses from short selling stock is not reported by a T5 or a T3 slip. CRA interpretation bulletins say that gains or losses from short selling securities are to be reported on the income account, not the capital gains account. Therefore the gains or losses from short selling stocks should be reported on Line 121 "Interest and Other Investment Income". However in the case of a loss due to short selling, Turbotax does not let me enter a negative number on line 121. Please advise further. Thank you

[ngrigoriev]

Once again, getting into troubles with CRA because of stupid TurboTax. And also, to be fair, some lack of imagination from CRA 🙂

As advised, I entered the loss from such a transaction into Federal Worksheet. There you have several lines to report _VARIOUS_ amount of income, including line 6, which is "Income from foreign sources, including foreign dividends, in Canadian dollars". This worksheet (line 12100) totals the income from all sources, including what is reported on T5s. Then the result goes to T1 12100.

I got reassessed by CRA one year after filing the return, now they want some money to cover recent Trudeau trips 😉 The reason: the amount on line 12100 does not match the T5 from the broker. In a way, they are right - because it does not and they do not know why, they do not know anything about this short sale and the fact that this loss goes to the income, not capital account. But it is also wrong because the amount on 12100 is not necessarily just from T5s. TurboTax allows me to use this worksheet to enter such amount, does the calculations correctly, but does not provide the numbers to CRA so they do not know what happened. And I do not know that CRA does not know 🙂 So, instead of telling me that I cannot NETFILE such a return, TurboTax files the return and later I have to pay extra (to stop CRA harassment) and file the request for adjustment and wait for 2+ months to get the refund.