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AFR - t5008's for transactions within a registered plan


#1

Just confirmed with a client’s financial advisor that all t5008’s on CRA AFR were transactions that took place within a registered plan.
I’m not sure best way to proceed, will cra match these up and include?


#2

It is possible that matching may ask; however, it they are in a registered plan, it is an easy fix. Sounds like the financial advisors company made a mistake or does not know what they are talking about.


#3

“Just confirmed with a client’s financial advisor that all t5008’s on CRA AFR were transactions that took place within a registered plan”

If a financial advisor told me that, my first silent thought to myself would be “this financial advisor is either looking at the wrong account, or doesn’t know what he/she is talking about” :wink:
However, in any event I would never be preparing anyone’s tax return without a pdf/paper copy of all the relevant documentation in hand. (required, per filing terms).
From there, it should be a straight-forward process to see what the clients holdings are, and what the transactions must be, so that it reconciles. If it doesn’t make sense, its probably not true… perhaps the financial institution will need to issue amended tax information if in contravention of S149
provisions.

Huge danger if the FA was talking nonsense and then the Preparer induces the Taxpayer to deliberately file a tax return omitting proper Capital Gains… :frowning:


#4

After speaking to both client and financial advisor they were both quite adamant that they did not have investments outside of registered funds. The financial advisor appeared to be well versed on the tax consequences. However the advisor mentioned a transfer in kind from one institution to another and client spoke of a TFSA, so Im now thinking that the registered investment was collapsed and moved into a TFSA. Havethere been any reports of slips being misreported to CRA?


#5

Verbal assurances and verbal signatures are worth the value of the paper they are written on… :wink: :grin:

As for CRA:
"…preparer … following rules: … “Slips and other documentation from which the return was prepared must be seen. Verify the authenticity of these information slips…”

Sounds like the taxpayer could have several Capital Dispositions to report - I now ask clients for holdings statements also at beginning and at end of year…

RAC might have more TFSA transaction clues also - but really, the taxpayer should be forthcoming with each, every, and all bits of tax-relevant documentation…


#6

One of my clients has about a dozen T5008 forms and one of them was in duplicate when I downloaded it from AFR. I asked the client to check with his advisor and his advisor told him the following:

Effective this year, the CRA allows registered users to download multiple Tax slips and Trading Summaries as well as the Return of Securities Transactions (T5008) through the CRA Auto-fill my return website.
In certain cases, clients holding mutual funds may see a T5008 issued by Scotia Capital as well as one issued by the Fund Company. However, clients are only required to claim one of the transactions and not both if the amounts are duplicated.
CRA Regulations require both the fund manager and the dealer to report a disposition on a T5008 when a mutual fund is held in a nominee account at a dealer. ScotiaMcLeod and other dealers have been working with the industry to address this duplication of reporting.

I’m ignoring the duplicate T5008 but I don’t know what CRA will eventually dio!


#7

It is likely been like this for years and CRA has done nothing. The only reason it is an issue now is because we accountants now know about them.


#8

Sometimes they have been doing nothing, but at other times “matching” have issued a re-assessment, doubling up on the income… then I have had to contact “matching” and tell them to undo their matchmaking…


#9

I agree that they have doubled up slips before; however, when dealing with T5008, there has been less action; however, that could change