Fill Tax Form re Flow through

[h***@istar.ca]

In 2013 I exchanged my shares for Inmet for First Quantum Ltd. I filled out a
T2057 form to the transfer agent. They sent me back a copy and said that they have sent a copy to Revenue Canada. I believe I have to pay no capital gains tax.
When I fill out my 2013 Tax Form do I have to fill out anything about this transaction and if I do what do I fill out?

[Canuck57]

Post by h***@istar.ca
In 2013 I exchanged my shares for Inmet for First Quantum Ltd. I filled out a
T2057 form to the transfer agent. They sent me back a copy and said that they have sent a copy to Revenue Canada. I believe I have to pay no capital gains tax.
When I fill out my 2013 Tax Form do I have to fill out anything about this transaction and if I do what do I fill out?

You must report these investments.

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/fts-paa/nvstr/menu-eng.html

[Sharxster]

Post by Canuck57

Post by h***@istar.ca
In 2013 I exchanged my shares for Inmet for First Quantum Ltd. I filled out a
T2057 form to the transfer agent. They sent me back a copy and
said that they have sent a copy to Revenue Canada. I believe I
have to pay no capital gains tax.
When I fill out my 2013 Tax Form do I have to fill out anything
about this transaction and if I do what do I fill out?

You must report these investments.

Only if you DO NOT file the T2057 election form. I've dealt with a
number of these, over the years, both for my own portfolio and for
those of clients. By filing the form, one re-calculates the
adjusted cost base to be the original cost MINUS any distributed
Return of Capital. Nothing more has to filed with the tax return
for the year of the exchange. HOWEVER, when any of the "new" shares
are sold, the capital gain/loss has to be calculated using that
RE-CALCULATED cost base.

Now, if one DOESN'T file the T2057 return with the transfer agent
or whatever company who is doing the paperwork, then a capital
gain/loss is immediately created as of the date of the share
"exchange" as per the formula: Fair Market Value of the "new"
shares on the exchange date MINUS the original ADJUSTED (for return
of capital, commissions, etc.) COST BASE. That gain/loss data would
be reported on a Schedule 3 form attached to the T1 tax return for
the year of the "exchange". Then the 'new" shares have a NEW
adjusted cost base EQUAL to that Fair Market Value I just mentioned
so that, when THEY are eventually sold, the resulting gan/loss will
use that NEW adjusted cost base in the calculation. It boils down
to when you want to pay the piper: NOW--then don't file the T2057
or LATER--then file the T2057.
You're welcome.

Post by Canuck57
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/fts-paa/nvstr/menu-eng.html
--
Socialist-statism corruption is a great idea so long as the
credit is good and other people pay for it. When the credit runs
out and those that pay for it leave, they can all share having
nothing but unemployment, debt and discontentment.

[h***@istar.ca]

Post by Sharxster

Post by Canuck57

Post by h***@istar.ca
In 2013 I exchanged my shares for Inmet for First Quantum Ltd. I
filled out a
T2057 form to the transfer agent. They sent me back a copy and
said that they have sent a copy to Revenue Canada. I believe I
have to pay no capital gains tax.
When I fill out my 2013 Tax Form do I have to fill out anything
about this transaction and if I do what do I fill out?

You must report these investments.

Only if you DO NOT file the T2057 election form. I've dealt with a
number of these, over the years, both for my own portfolio and for
those of clients. By filing the form, one re-calculates the
adjusted cost base to be the original cost MINUS any distributed
Return of Capital. Nothing more has to filed with the tax return
for the year of the exchange. HOWEVER, when any of the "new" shares
are sold, the capital gain/loss has to be calculated using that
RE-CALCULATED cost base.
Now, if one DOESN'T file the T2057 return with the transfer agent
or whatever company who is doing the paperwork, then a capital
gain/loss is immediately created as of the date of the share
"exchange" as per the formula: Fair Market Value of the "new"
shares on the exchange date MINUS the original ADJUSTED (for return
of capital, commissions, etc.) COST BASE. That gain/loss data would
be reported on a Schedule 3 form attached to the T1 tax return for
the year of the "exchange". Then the 'new" shares have a NEW
adjusted cost base EQUAL to that Fair Market Value I just mentioned
so that, when THEY are eventually sold, the resulting gan/loss will
use that NEW adjusted cost base in the calculation. It boils down
to when you want to pay the piper: NOW--then don't file the T2057
or LATER--then file the T2057.
You're welcome.

Post by Canuck57
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/fts-paa/nvstr/menu-eng.html
--
Socialist-statism corruption is a great idea so long as the
credit is good and other people pay for it. When the credit runs
out and those that pay for it leave, they can all share having
nothing but unemployment, debt and discontentment.

I am also planning to transfer Petro Canada shares to Sunoco shares four years
late. I phoned the transfer agent Computer Share and they tell me it is not necessary to send them a T2057 form to get a deferred capital gain. What is the
difference between the this case and the transfer between Inmet and First Quantum.

[Canuck57]

Post by Sharxster

Post by Canuck57

Post by h***@istar.ca
In 2013 I exchanged my shares for Inmet for First Quantum Ltd. I filled out a
T2057 form to the transfer agent. They sent me back a copy and
said that they have sent a copy to Revenue Canada. I believe I
have to pay no capital gains tax.
When I fill out my 2013 Tax Form do I have to fill out anything
about this transaction and if I do what do I fill out?

You must report these investments.

Only if you DO NOT file the T2057 election form. I've dealt with a
number of these, over the years, both for my own portfolio and for
those of clients. By filing the form, one re-calculates the
adjusted cost base to be the original cost MINUS any distributed
Return of Capital. Nothing more has to filed with the tax return
for the year of the exchange. HOWEVER, when any of the "new" shares
are sold, the capital gain/loss has to be calculated using that
RE-CALCULATED cost base.
Now, if one DOESN'T file the T2057 return with the transfer agent
or whatever company who is doing the paperwork, then a capital
gain/loss is immediately created as of the date of the share
"exchange" as per the formula: Fair Market Value of the "new"
shares on the exchange date MINUS the original ADJUSTED (for return
of capital, commissions, etc.) COST BASE. That gain/loss data would
be reported on a Schedule 3 form attached to the T1 tax return for
the year of the "exchange". Then the 'new" shares have a NEW
adjusted cost base EQUAL to that Fair Market Value I just mentioned
so that, when THEY are eventually sold, the resulting gan/loss will
use that NEW adjusted cost base in the calculation. It boils down
to when you want to pay the piper: NOW--then don't file the T2057
or LATER--then file the T2057.
You're welcome.

Yep, you are right, as you can defer the gains.

But I prefer to realize them ASAP, and to offset the added gains, I
reduce my RRSP/IRA/LIF draws, trying to average my taxes at a level I am
comfortable with. My cumulative gains are quite high so I like
averaging them down....

But if in a high or wage income year, I can see why taxpayers should
consider gains deferment especially if retirement is coming up.

One thing must remember with this cost adjustment crap is obfuscates
real earnings. Say you drop 10,000 into one, it cost adjusts down to
$9000 as does the share price drop to say $9200, a $1000 (10%) return of
mostly return of capital is really only $200 and a tax mess.

I have one doing this and ready to dump it. Sure, I am making money but
it hides its poor performances with complexity.