Bug Report: Potential overstatement of taxable income

user17761040282 — Mon, 13 Apr 2026 18:21:40 GMT

Subject: Escalation – TurboTax Canada 2025 Incorrect Integration of T5008 (Auto-fill) and T1170 (Donated Securities)

Summary
TurboTax Canada 2025 does not correctly reconcile capital gains imported via CRA Auto-fill (T5008 slips) with amounts reported on Form T1170 (Gifts of Publicly Traded Securities). This leads to duplicate reporting of capital gains and potential overstatement of taxable capital gains.

Technical Description

Data Sources:

CRA Auto-fill → populates T5008 slips
Manual entry → Form T1170 (donated publicly traded securities)

Relevant Forms and Lines:

Schedule 3 → Line 19900 (total capital gains)
T1170 → Line 68230 (eligible capital gains on donated securities)
T1 General → Line 12700 (taxable capital gains)

Observed Behavior

T5008 entries (from Auto-fill) generate capital gains included in:
- Schedule 3 Line 19900
Manual T1170 entries include:
- Same securities’ gains on Line 68230 (eligible for 0% inclusion)
No linkage or reconciliation occurs between:
- Schedule 3 dispositions (T5008-driven)
- T1170 reported gains
Result:
- Gains are effectively counted twice in the workflow
- Inconsistent state possible:
  - T1170 Line 68230 > Schedule 3 Line 19900
- Taxable capital gains (Line 12700) may be overstated

Expected Behavior

One of the following should occur:

Option A (Preferred):

T5008 entries flagged as “donated securities.”
Automatically routed into T1170 logic
Inclusion rate adjusted to 0%

Option B:

System prompt after Auto-fill:
“Do any T5008 transactions represent donated securities?”
User selection links entries to T1170

Option C:

Validation rule enforcing:
- T1170 Line 68230 ≤ Schedule 3 Line 19900
- Trigger warning if violated

Root Cause Analysis

CRA Auto-fill imports T5008 data without semantic classification (sale vs donation)
T1170 operates as an independent input path
No reconciliation layer exists between:
- Capital disposition reporting (Schedule 3)
- Preferential inclusion treatment (T1170)

Risk / Impact

High risk of overpaying taxes
Particularly affects users following best practices:
- Using CRA Auto-fill
- Correctly completing T1170
Error is non-obvious:
- Schedule 3 appears valid
- T1170 appears valid
- Mismatch only visible through cross-form validation

Recommended Fixes

Cross-form validation engine:
- Enforce consistency between Schedule 3 and T1170
Auto-fill enhancement:
- Allow tagging of T5008 transactions as:
  - Sale
  - Gift (donation)
Form linkage:
- Map T5008-derived gains to T1170 when flagged
User warnings:
- Detect duplicate economic events across forms

Workaround (Current)

Delete T5008 entries related to donated securities
Enter transactions exclusively via T1170 workflow

Conclusion
This is a structural integration issue between Auto-fill data ingestion and tax treatment logic. Addressing it would significantly improve accuracy and prevent silent over-reporting of taxable capital gains.

Re: Bug Report: Potential overstatement of taxable income

Hi Palms — Mon, 13 Apr 2026 18:33:14 GMT

Good report, WRONG FORUM! You want the TurboTax Canada Community.

https://turbotax.community.intuit.ca/turbotax-support/en-ca

topic Bug Report: Potential overstatement of taxable income in Getting started

Bug Report: Potential overstatement of taxable income

Re: Bug Report: Potential overstatement of taxable income