How does one determine the TYPE for each T50008?

[Gigahoo]

How is one supposed know what the 'TYPE' is for each T50008?  

The options are either INVESTMENT or CAPITAL GAINS.   Downloaded from CRA, the TYPE field defaults to blank.  

Even my financial planner was stumped about this one.   I asked CRA helpline, their response is that the T50008 is for  capital gains, and what I answer is unimportant as long as the amounts are correct.    I'm guessing the INVESTMENT type is for people that want to use the T50008 for dividends.  How is the TYPE field used in Turbotax? It would help if Turbotax provided an explanation.

[TurboTaxJeffrey · Accepted solution]

"Investment" is for money made from debt obligations, such as a Treasury Bill.  It is recorded as Interest income. Capital Gains is used to record the disposition of shares/stocks.  If your T5008 represents the sale/disposition/deemed disposition of securities (again, shares, stocks, etc) then the type is "Capital Gains."  This is important as Capital Gains are taxed at half the rate of most types of income.  For example, if you had a capital gain of $10,000 you are only taxed on $5,000.

Interest income is taxed at the full tax rate.

Your financial advisor should know the difference in tax treatment of these investments.

http://www.cra-arc.gc.ca/E/pub/tg/t4091/t4091-e.html#P129_4770

[Gigahoo]

A financial advisor may know the difference in the tax treatment of these investments but may not make the connection to T5008's.    In fact, I talked to 2 CRA advisors on their helpline that failed to make the connection, seeing the T5008 as all about capital gains.

[TurboTaxJeffrey]

Seeing as the financial advisor would be issuing the t5008 they should understand.

As to CRA...the T5008 is their form

[TurboTaxJeffrey]

Stan, that's enough.

[paytonelizabeth2]

Yeah it's pretty obvious. Anyone with a brain can figure it out.

[paytonelizabeth2]

It doesn't matter whether the field is on the form...any financial planner worth their salt would realize what is being asked...as any financial planner knows there are two types of income reported on a t5008. How do I know? Guess what I do for a living.