From: Canuck57@nospam.com   
      
   On 25/03/2014 6:21 PM, Sharxster wrote:   
   > "Canuck57"  wrote in message   
   > news:doiYu.111358$6Q1.23115@fx21.iad...   
   >> On 10/03/2014 5:43 PM, heich1@istar.ca wrote:   
   >>> 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.   
      
   --   
   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.   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)