Author Topic: Canada/CRA - 'identical property' for cap gains/ACB  (Read 549 times)

daverobev

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Canada/CRA - 'identical property' for cap gains/ACB
« on: April 12, 2017, 09:24:31 AM »
Any thoughts (or even better, hard facts!) on whether the CRA considers a share and an ADR holding multiples of those shares to be 'identical'?

I have some shares in an old account and don't want to touch the ACB because it's too much hassle; the brokerage is not Canadian, doesn't do tax forms for Canada. I can't buy in that brokerage because I am not resident where they are.

I would like to buy some more shares. I could buy the ADR in my Canadian brokerage account. But not if it messes with my ACB. I want to keep the 'old' and 'new' stuff separate.

daverobev

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Re: Canada/CRA - 'identical property' for cap gains/ACB
« Reply #1 on: April 12, 2017, 09:56:34 AM »
What I have found, but doesn't give a clear statement:

http://www.cra-arc.gc.ca/E/pub/tp/it387r2-consolid/it387r2-consolid-e.html#P79_8855

Quote
...are the same in all material respects, so that a prospective buyer would not have a preference for one as opposed to another.

I'd lean to no, the ADR is a wrapper - you own the ADR not the shares... The properties are different... but:

Quote
Two properties which are otherwise identical do not cease to be so merely because one is subject to a charge or other external condition which may affect its price and the other is not, provided the external condition does not change any of the constituent elements of the particular property (e.g., provincial retail sales tax, commission fees).

That makes me lean the other way.

RichMoose

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Re: Canada/CRA - 'identical property' for cap gains/ACB
« Reply #2 on: April 12, 2017, 11:18:05 AM »
I would lean to saying the CRA would consider them to be identical. I believe there is a dated bulletin out there which relates to index funds. It basically said that if you trigger a loss by selling one fund that tracks the TSX Composite and buy another fund from a different company that tracks the TSX Composite within the 30 day period your loss would be denied as superficial.

I know it's not the same thing as your issue, but the indicators would suggest the CRA considers it to be one and the same if the underlying holding is the same.