T3/T5 reporting problems

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T3/T5 reporting problems

Postby Norbert Schlenker » 15 Feb 2012 12:49

Probably needs its own thread because slips are starting to arrive. Why should this year be any better as far as errors go?

BMOIL T5 problem

I own BAM.PR.N. BAM pays dividends on its preferreds on the last day of the quarter, so there was a dividend payable on December 31, 2011, a Saturday. BMOIL credited the dividend on January 3, 2012, the next business day. Legally, I think that's a 2011 dividend. BMOIL hasn't included it on their T5. (Why did I notice? Because I reconcile against my own portfolio management reports of taxable income.)

I have an inquiry in to BMOIL. We'll see if it changes and, if so, how late. Good thing I don't file tax returns until April 30.
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Re: T3/T5 reporting problems

Postby newguy » 15 Feb 2012 12:59

IB always did the same thing as well with my iShares stuff. Then I saw someone on here mention that the day you get the money is the day you pay tax. FWIW I always file using whatever numbers that get reported to the CRA.

newguy

add: I'm not sure I can find the post I was thinking of but I found this.
viewtopic.php?p=377445#p377445

Arby wrote:(Just to confuse things, CRA treats Dividend income differently than other forms of income. Dividend income is taxed in the year it is received.)
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Re: T3/T5 reporting problems

Postby Bylo Selhi » 15 Feb 2012 13:01

General comment: Even if the T-slip is wrong and the institution won't/can't revise it in time, you can still file your return with what you consider to be the correct numbers. If you paper-file then include an explanatory note with supporting documentation. If you net-file then send them the same note by snail-mail. I've done the latter on several occasions and never heard further from CRA.

I'm not aware of any mechanism to add explanatory notes to e-filed returns, either in the tax preparation software or on CRA's MyAccount site. If those options exist, please post details below.
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Re: T3/T5 reporting problems

Postby like_to_retire » 15 Feb 2012 14:09

newguy wrote:IB always did the same thing as well with my iShares stuff. Then I saw someone on here mention that the day you get the money is the day you pay tax..........

Nope, the record date is the taxation date. Doesn't matter when you get the money.

I'm not sure I can find the post

here.

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Re: T3/T5 reporting problems

Postby newguy » 15 Feb 2012 15:08

like_to_retire wrote:
newguy wrote:IB always did the same thing as well with my iShares stuff. Then I saw someone on here mention that the day you get the money is the day you pay tax..........

Nope, the record date is the taxation date. Doesn't matter when you get the money.

I'm not sure I can find the post

here.

ltr

Yeah that's it. And again it was Arby

Arby wrote:It depends on the characteristic of the distribution. If the distributions are in the form of interest or other income, they are taxed in the year they are earned, (which is the year of the Record Date). If the distributions are in the form of dividends, they are taxed in the year they are actually received, (which is the year of the Payment Date).


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Re: T3/T5 reporting problems

Postby izzy » 15 Feb 2012 15:26

newguy wrote:
like_to_retire wrote:
newguy wrote:IB always did the same thing as well with my iShares stuff. Then I saw someone on here mention that the day you get the money is the day you pay tax..........

Nope, the record date is the taxation date. Doesn't matter when you get the money.

I'm not sure I can find the post

here.

ltr

Yeah that's it. And again it was Arby

Arby wrote:It depends on the characteristic of the distribution. If the distributions are in the form of interest or other income, they are taxed in the year they are earned, (which is the year of the Record Date). If the distributions are in the form of dividends, they are taxed in the year they are actually received, (which is the year of the Payment Date).


newguy

Exception? -the year of death when dividends declared but not paid (not sure how this could be arranged -possible loophole? can anyone explain?) and bond coupons not cashed can go on a "rights and things return".
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Re: T3/T5 reporting problems

Postby Bylo Selhi » 15 Feb 2012 15:52

Unless the amount of payment is substantial, e.g. enough to bump up the tax bracket in 2012, I'm having trouble imagining why CRA would object if the taxpayer reported a dividend in 2011 that they could have deferred to 2012.
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Re: T3/T5 reporting problems

Postby Jaunty » 15 Feb 2012 16:29

I don't keep track of what money I should have received on the date of record, so I pay my taxes according to my T slips. iShares will throw me off this year, so I'll calculate my taxes both ways and see if it makes a difference. If it does, I'll report to CRA based on the date of record, but now I'll have to look up the date of record for the other stocks I hold and see if I need to include other income too. grrr
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Re: T3/T5 reporting problems

Postby AltaRed » 15 Feb 2012 18:52

I simply include what the T3/T5 tells me it is. I think CRA prefers that the numbers match. Why make some civil servant tear his/her hair off reconciling differences?
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Re: T3/T5 reporting problems

Postby Norbert Schlenker » 17 Feb 2012 13:01

Reading comprehension not their strong suit.

BMOIL wrote:Thank you for contacting BMO InvestorLine using MyLink. My name is P*** C**** and I appreciate the opportunity to respond.

The preferred dividend is paid on December 31 and the Record date was on December 15. As such , it would be included in 2011 income only and not 2012.

Followup sent.
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Re: T3/T5 reporting problems

Postby Norbert Schlenker » 29 Feb 2012 20:33

With regret I must report that BMOIL has now sent me two followup emails assuring me that the dividends belong in 2011 but with no assurance that the T5 will be corrected. The second email suggested that new T5s would be issued for split share companies, the implication being that Brookfield is somehow one of these. :(
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Re: T3/T5 reporting problems

Postby Norbert Schlenker » 06 Apr 2012 22:22

Input: BMOIL now tells me the dividend belongs in 2012. The company tells me it belongs in 2012. The transfer agent tells me it belongs in 2011.

Output: I'm using the T5 as printed.

Oy.
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