Average ACB across accounts

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Irwin
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Average ACB across accounts

Post by Irwin » 02 Dec 2017 09:04

I currently own MAW104 Mawer Balanced Fund in my RRSP.

If I buy MAW105 Mawer Tax Effective Balanced Fund in a non-registered account, would CRA require that the Adjusted Cost Base be averaged?

Thanks.

queerasmoi
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Re: Average ACB across accounts

Post by queerasmoi » 02 Dec 2017 10:35

Irwin wrote:
02 Dec 2017 09:04
I currently own MAW104 Mawer Balanced Fund in my RRSP.

If I buy MAW105 Mawer Tax Effective Balanced Fund in a non-registered account, would CRA require that the Adjusted Cost Base be averaged?

Thanks.
Two answers:
1. Unless there are special reasons why they count as the same fund, you would not average these in general.
2. You would not generally record ACB at all in RRSP, much less average with a taxable account. The only scenario I know where you care at all that the same thing is in taxable and RRSP accounts is, if you sell in the taxable account at a loss and buy it back in RRSP within 30 days. In that case the capital loss may be denied.

Irwin
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Re: Average ACB across accounts

Post by Irwin » 02 Dec 2017 11:19

^^ Thanks for that.

There is a possibility that MAW104 and MAW105 would fall under the "Identical Property" rule.

For some reason I had the notion that identical properties held in RRSP and non-registered accounts had to be combined as one holding. Good to know that is not the case.

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AltaRed
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Re: Average ACB across accounts

Post by AltaRed » 02 Dec 2017 11:53

The only time I am aware of that 2 funds are Identical Property is if the only difference is in Class (MER) structure, e.g. A class, B class, F class. It appears to me that MAW105 and MAW104 have slightly different sector weightings and asset allocations, with an internal strategy on MAW105 to minimize taxable distributions. I wouldn't consider them Identical Property.
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Irwin
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Re: Average ACB across accounts

Post by Irwin » 02 Dec 2017 12:28

^^ Even better!

Thank you.

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patriot1
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Re: Average ACB across accounts

Post by patriot1 » 02 Dec 2017 12:56

Even if it's the very same security held in a taxable account and an RRSP, the holdings in the latter don't count against the ACB in the former.

They do count with regard to superficial losses in the taxable account. That's all.

Irwin
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Re: Average ACB across accounts

Post by Irwin » 02 Dec 2017 13:05

^^ gotcha

Thanks

max88
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Re: Average ACB across accounts

Post by max88 » 02 Dec 2017 13:32

queerasmoi wrote:
02 Dec 2017 10:35
Two answers:
1. Unless there are special reasons why they count as the same fund, you would not average these in general.
2. You would not generally record ACB at all in RRSP, much less average with a taxable account. The only scenario I know where you care at all that the same thing is in taxable and RRSP accounts is, if you sell in the taxable account at a loss and buy it back in RRSP within 30 days. In that case the capital loss may be denied.
2+ if you buy in RRSP and subsequently sell in the taxable account at a loss within 30 days, the cap loss is also denied.
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