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Let me recap here ... yes the RoC shows up on the T3, but the ETF's reinvested distributions (aka phantom distributions) do not.

As the reinvested distributions are just as critical an adjustment as RoC, and occur frequently across all kinds of ETFs, that means that T3 slips alone are not enough to track the ACB. If you're only using T3s for ETF tracking, then you might overpay taxes substantially ...
Yes ... plus one needs to consider that the number of ETFs distributing phantom distributions looks like it is increasing. According to the article that has a link below, when comparing 2011 to 2012, the number of funds that did so almost doubled (from 45 to 74).

For those like me who have held popular iShares funds for a long time, two of those have phantom distributions totaling $7 a unit (likely higher now as it's a 2013 article).

http://www.bertmulder.com/avoid-paying-tax-twice-on-etf-distributions/


It doesn't matter to me for now as I have them in registered accounts but some of them will have to be de-registered at some point.


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... I’m with you that it’s a pain to track ACB. I’m sure there are many who don’t adjust their ACB at all. There’s a box for the amount resulting in cost base adjustment on your T3 (box 42), but brokerages (at least mine) only seem to put the RoC there. It’d be nice if they included the non-cash distributions ...
Trouble is ... until the consumer revolts, who has any incentive to change?

The brokerages won't want to spent the extra time/effort and CRA/the Feds are happy to get extra capital gains taxes to help with their pet projects.


... As far as I can tell, for BMO ETFs, the CDS Innovations (or one of those web site services) are the only way you can calculate this yourself. For iShares, you can use the annual tax characteristics document which I think is easier to work with than CDS Innovations. And you can always check against the broker's records. Am I covering all the methods? ...
You seem to have missed post #12.

Where BMO's web site is providing a "for that year" breakdown of the tax types *and* the same for the phantom distributions - what's missing that makes it so hard to calculate?

Or are you saying you don't trust the numbers from BMO web site?


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Getting the information on a timely basis is the main issue I've had ... the math is tedious but nothing a spreadsheet can't handle, when designed with some planning.

The phantom distributions are what's unique to ETFs but unless I'm missing something, as outlined in post #12 ... BMO seems to have handled it reasonably well.


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Discussion Starter · #26 ·
Getting the information on a timely basis is the main issue I've had ... the math is tedious but nothing a spreadsheet can't handle, when designed with some planning.

The phantom distributions are what's unique to ETFs but unless I'm missing something, as outlined in post #12 ... BMO seems to have handled it reasonably well.
I missed that post, thanks for repeating it. You're saying to look at the Tax tab under the BMO ETF web pages.

You're right, the phantom/reinvested distribution is shown here and can be downloaded in their nice spreadsheet -- this is great. This is the only place I have seen these clearly summarized!

And return of capital is shown in the summary table for the year, which is also good. The only thing this does not capture is which month the RoC occurred in. In the case of iShares, this has monthly granularity so if you buy or sell during the year you'll need to know which month the RoC occurred. Do you know if BMO's funds work differently, perhaps ROC is just a single year-end event?

But yes I agree, their Tax tab shows all the detail you need for Reinvested Distributions. Yay!
 

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I missed that post, thanks for repeating it. You're saying to look at the Tax tab under the BMO ETF web pages.

You're right, the phantom/reinvested distribution is shown here and can be downloaded in their nice spreadsheet -- this is great. This is the only place I have seen these clearly summarized!
Cool ... when the views disconnect so much, I wonder if I missed something. :biggrin:


And return of capital is shown in the summary table for the year, which is also good. The only thing this does not capture is which month the RoC occurred in. In the case of iShares, this has monthly granularity so if you buy or sell during the year you'll need to know which month the RoC occurred. Do you know if BMO's funds work differently, perhaps ROC is just a single year-end event?
I wouldn't expect they'd be yearly ... but will have to check as I don't own any of them.

However, I get the granularity from the broker summary statement for the T3. For example, a particular T3 might roll up three investments but the associated details sheet will show the info. For example, for investment #1 on Feb 25th - there are two entries. The first is box 49 of $12 (i.e. dividends) and the second is box 42 (i.e. RoC) of $72.


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Discussion Starter · #28 · (Edited)
This might be useful context. I basically manage (with allocations they determined) an ETF portfolio for my parents. I posted some details earlier... over 9 years it's performed better than most mutual funds they own and they want me to keep running it. As part of helping them out with this, I'm also handling their ACB reporting to make life easier. So far this has gone well. They would not bother with the discount brokerage unless I was helping them out with this and I'm desperately trying to keep them away from Investors Group high MER funds.

Because I live in a different city, and can't easily see their T3s, I want a way to do the ACB tracking that I can do with data available to me.

Luckily, the share holdings are very static, so the RoC data I can get from the BMO web site (not monthly) plus the reinvested distribution data should be enough for me to keep on top of ACB. iShares funds are already ok; their annual tax characteristics document has everything I need.

Some time this year I plan to switch a bunch of their fixed income into ZDB, a tax efficient bond fund from BMO, and before I got them into a BMO fund I wanted to be crystal clear on how I'd track the ACB.
 

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... Because I live in a different city, and can't easily see their T3s, I want a way to do the ACB tracking that I can do with data available to me ...
Can they get their T3's from the broker as PDFs by signing up with the broker for electronic delivery of their tax documents?

Then either by them granting signin access or dumping the PDFs to a CD then sending it to you (or whatever delivery method the two of you are comfortable using) - the location shouldn't be an obstacle.


If they have the T3's & summary documents in a filing cabinet in paper form - it would probably take some co-ordination but a scanner would give you the back history. Having electronic versions going forward plus the BMO web site should make it manageable, though tedious.


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Not sure if you've looked at the website www.adjustedcostbase.ca for tracking the ACB. If nothing else they have some interesting info in their blog. The following link discusses the capital gains phantom distributions:
http://www.adjustedcostbase.ca/blog/phantom-distributions-and-their-effect-on-adjusted-cost-base/

I think you really need to use both the T3 / T5 and the CDS Innovations info to correctly track the ACB.

For your parents, they could set you up as their representative for their CRA My Account, then you can review their T3 / T5 online.
 

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... I think you really need to use both the T3 / T5 and the CDS Innovations info to correctly track the ACB.
From what I recall of the write up of how to find phantom distributions from the CDS Innovations info - I am wondering why one would want to add to one's work instead of using BMO's nice table?

AFAICT ... everything needed except the breakdown of when specific amounts of RoC was paid is on BMO's web site. The T3 summary info or the CDS Innovations can help with this but will only be required where there are multiple buys in the year or a DRIP.


... For your parents, they could set you up as their representative for their CRA My Account, then you can review their T3 / T5 online.
It is good to know about this relatively recent choice.

For those who need the totals, this is good.

OTOH, the OP says he needs the date & amount of RoC paid during the year. Unless CRA is also providing the broker summary document that breaks down the totals, by investment ... it might not suffice for his needs.

Can anyone confirm that the broker summary documents are included in addition to the T3 that was issued?

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Discussion Starter · #32 ·
From what I recall of the write up of how to find phantom distributions from the CDS Innovations info - I am wondering why one would want to add to one's work instead of using BMO's nice table?
I tend to agree with you here. I still can't even view the CDS Innovations table on OpenOffice. (I can on LibreOffice by un-hiding the Macro sheet, but that doesn't work in OpenOffice). In comparison, BMO's table is nice and simple -- beautiful.

The ROCs are a minor concern in my case because shares are purchased once and held for long periods. It was really the reinvested distributions that had me worried, and BMO's table answers that.
 

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I suppose I find it easier, less work, to log onto the CDS website and then grab the CDS spreadsheet for each ETF that I need, rather than going to the different ETF companies websites and finding that information. Maybe it's just because that's how I first started to track it. I also find that the CDS spreadsheet is easier to understand and follow than the info from BMO or iShares, because it has all of the information I need. From the CDS spreadsheet you can see the breakdown of each distribution (return of capital, capital gain, etc) and if they are non cash, which is more helpful than just a yearly breakdown that BMO provides.

For example in 2014 ZLB had a non cash Reinvested Distribution Per Unit at the end of December of $0.628834, of which it was made up of a Capital Gain of 99.2047% and 0.7953% was Return of Capital. You could figure this out from the T3 Summary and the BMO website, since BMO does tell you what the reinvested distribution amount was for December 2014. Looking at the CDS spreadsheet it's very clear that ZLB really did have non cash RoC.

I don't believe that the CRA My Account has the trading summary info from the broker, just the T slips. Between the T slips from the CRA and the CDS spreadsheet he can see the breakdown or each distribution. Although it would be better to also have the summary from the broker to verify against.
 

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Discussion Starter · #35 · (Edited)
Yes unfortunately there has been more than one instance of ETF providers giving incorrect info. I've experienced that first-hand.

Interesting that CDS Innovations is the definitive source. Perhaps the best strategy is rely on these as they do in fact show all distributions.

However they really need to change that format. Their document format does not have good compatibility. Using macros and proprietary formats for this purpose is considered very bad style in computing and data sharing.
 

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Discussion Starter · #36 ·
Seriously, how the hell does one even open these CDS Innovations spreadsheets? Now I'm trying it with Microsoft Excel 2011. When I open the spreadsheet, I get a question about macros. I said to Enable macros, and now Excel tells me: "Compile error in hidden module: ThisWorkbook". The resulting spreadsheet is blank -- nothing visible.

Even if you manage to open these, I doubt that these are going to work as proof/collateral for the long term since they are not easy to open. You really think the CRA is going to be able to open one of these spreadsheets 10 years in the future?

I have a masters degree in Computer Engineering.
 

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Seriously, how the hell does one even open these CDS Innovations spreadsheets? Now I'm trying it with Microsoft Excel 2011. When I open the spreadsheet, I get a question about macros. I said to Enable macros, and now Excel tells me: "Compile error in hidden module: ThisWorkbook". The resulting spreadsheet is blank -- nothing visible.

Even if you manage to open these, I doubt that these are going to work as proof/collateral for the long term since they are not easy to open. You really think the CRA is going to be able to open one of these spreadsheets 10 years in the future?

I have a masters degree in Computer Engineering.
It works for me on 2 computers, both Win10, one Excel 2010, the other Excel 2013.

1) Opens with a yellow banner that says "Protected View Be careful bla blah blah Enable Editing", and below that it says in red "Sorry you must enable macros...". At this point i just click "Enable Editing" in the top yellow banner.

2) Another yellow banner that says "Security Warning Macros have been enabled with the same red "Sorry you must enable macros". At this point click "Enable Content" and the sheet opens. I did not have to go into options or settings to enable macros at all, just click the Enable buttons on the sheet.

Is that not your experience?

Also I think someone else mentioned upthread that BMO reports in %, whereas iShares and Vanguard report in $.
 

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I suppose I find it easier, less work, to log onto the CDS website and then grab the CDS spreadsheet for each ETF that I need, rather than going to the different ETF companies websites and finding that information.
One site is good ... though I'm not sure I am switching anytime soon as I am having a hard time finding the few I would need.
Or does the login let you set some filters?



Maybe it's just because that's how I first started to track it. I also find that the CDS spreadsheet is easier to understand and follow than the info from BMO or iShares, because it has all of the information I need.
If/when I can get a copy I can see ... it will be easier to tell.


... From the CDS spreadsheet you can see the breakdown of each distribution (return of capital, capital gain, etc) and if they are non cash, which is more helpful than just a yearly breakdown that BMO provides.
As I keep repeating from post #12. after setting the year one wants ... two tables are on the same page. The yearly breakdown *and* any non-cash distributions. I can see why one document may be preferred but BMO is providing more than "just a yearly breakdown".



... For example in 2014 ZLB had a non cash Reinvested Distribution Per Unit at the end of December of $0.628834, of which it was made up of a Capital Gain of 99.2047% and 0.7953% was Return of Capital. You could figure this out from the T3 Summary and the BMO website, since BMO does tell you what the reinvested distribution amount was for December 2014 ...
??? ... why would one need a T3 summary for the re-invested distribution (aka phantom)?

After filtering for "ZLB" and "2014", the first table has a Dec 24th re-invested payment, where the note for that column explicitly says "Distributions by the BMO ETF that are not paid in cash should be accounted for by investors for tax purposes by adding the distribution amount to the adjusted cost base of the units held."

The second table has the breakdown for the different types.


Or am I missing something?


... Between the T slips from the CRA and the CDS spreadsheet he can see the breakdown or each distribution ...
I thought the CDS spreadsheets were complete so I'm not following why the CRA T slips and/or the broker T slip summaries would be needed?

Or are you thinking the OP might have the wrong number of ETF units from his parents?


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... Also I think someone else mentioned upthread that BMO reports in %, whereas iShares and Vanguard report in $.
I'll have to search the thread to be sure of my memory that the CDS Innovations sheets use %.

When I checked 2015 ZLB distribution charge on BMO's web site against yahoo's historical dividends, the dates & $ matched. It seems clear BMO's web site is reporting $$, just as iShares and from what I recall, Vanguard does.


Cheers

PS

The OP in post # 5 says the CDS Innovations is by %.
 
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