Another t1135 question. Please help

[johnjohnson55]

Please help! I believe I've read almost all t1135 posts, and they're quite case-specific. My questions are basic (please don't refer me to the CRA website and/or definitions as I've read and reread them. I also read what's on taxtips.ca and similar websites I've come across from other t1135 posts). I'm going to pose a simple scenario, please ELI5 how to do it (I hope this helps future people looking for a similar basic understanding question).

Scenario (all currencies are USD)

In 2021, I had 6 shares vested at $10/share (call these 2021-shares). I didn't sell anything. I was given $2 dividends.

In 2022, I had 5 shares vested at $11/share (call these 2022-shares). I didn't sell anything. I was given $3 dividends.

In 2023, I had 10 shares vested at $15/share (call these 2023-shares). I was given $5 dividends.

Assume at this point I crossed to 250k, so I need to do the detailed reporting.

In September 2023, I sold 4 2023-shares for $16/share.

In October 2023, I transferred $8 of dividends.

In November 2023, I sold 3 2021-shares and I sold 2 2022-shares for $20/share.

In December 2023, I had 2 shares vested at $21/share.

My solution (please correct me where I'm wrong):

Let x_2021 be the BoC exchange rate for 2021 (and similarly for other years).

Maximum cost amount during the year: (6 * $10 * x_2021) + (5 * $11 * x_2022) + (3 * $16 * x_2023)

Here I didn't include the December vest, because the sept/nov sale has a higher value than the dec vest so it wouldn't have increased the maximum cost amount. Is this correct?

Cost amount at year-end: [(6-3) * $10 * x_2021] + [(5-2) * $11 * x_2022] + [(10-4) * $15 * x_2023] + [2 * $21 * x_2023]

Here I basically just subtracted the shares I sold for every year. Is this correct?

Gross Income: Is this dividends of 2023 only or all dividends up till December 2023? What about the dividends I transferred?

My answer: $5 * x_2023 (just the dividends I was given in 2023, regardless of what I transferred). Is this correct?

Gain (loss) on disposition: [4 * ($16-$15) * a] + [3 * ($20-$10) * b] + [2 * ($20-$11) * b] - 2 * c, where:

a is the daily exchange rate for the september sale.

b is the daily exchange rate for the november sale.

c is the etrade commission for every sale I make (2 this year).

Thank you to anyone who read till the end and is thinking of answering. I posted on cantax as well.

 

[heavenlyimages]

@johnjohnson55 Maybe. Not going through all of that. Gain/loss is based on your ACB, so if that is what you are calculating there, then good, otherwise https://www.adjustedcostbase.ca/

Exchange rates for investments are based on the daily rate (or actual) on the day there is a transaction.

 

[psh2124]

@johnjohnson55 You seem to be using a sale price in your calculation for maximum cost during the year - you should only be using the cost in Cdn$.

Take your total cost in Cdn$ before you sold any shares. Calculate average cost per share by dividing the total cost by the number of shares.

To get the total ACB after selling shares, deduct # of sold shares x average cost per share from the previous total ACB. The result is the total ACB of the remaining shares, to determine if your ACB is over $250k.

The gain on disposition is proceeds less ACB less commission.

You only have to report the dividends earned in 2023.