When to report mutual funds sold in late December

April 6, 2014 9:03 PM

I'm Canadian. I redeemed some mutual funds in very late Dec 2013. The redemption appears on my Jan 2014 statement. I have capital gains from the redemption. Should I report these capital gains now on my 2013 tax return, or next year on my 2014 tax return?

So exactly what happened is I needed to move some investments. In late December, I called my bank (ING Direct) and I said I want to sell these funds. They said, okay, but if this is for tax reasons you should know that it's a January 2014 sale and it's not to be reported for this year.

I just want to double check that this is true, and if I am understanding correctly what the bank told me.

My January 2014 statement reads like this:
Opening balance: {amount x}
Dec 31 2013 - you redeemed {amount x}
Closing balance: 0.00

I'm just a little unsure, because the line item reads 2013.

posted by tracert to Work & Money (5 answers total)

You sold it in 2013. Take the gains or losses when you sold them, not when your statement closed. ING probably assumed the sale would close on Jan 1.

I am not a lawyer or accountant.
posted by bensherman at 9:26 PM on April 6, 2014

I'd call them again and ask them to verify when the transaction actually occurred, versus just when it was initiated, and if it was 2013, why it didn't appear until your 2014 statement. Presumably they'll be able to do more than just speculate.
posted by Sequence at 9:59 PM on April 6, 2014

Yes, just find out when the trade was executed. It doesn't matter when you told them to sell, it only matters when they sold.
posted by Justinian at 9:59 PM on April 6, 2014

Here in the states, it's not your statement you'd refer to for tax purposes, it's the Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, which is issued by the broker. I suspect Canada has a similar reporting form. (Maybe , T5013, T4PS, and T3 information slips?)

Maybe try noodling about your brokerage website and look for such a tax document.
posted by Short Attention Sp at 6:00 AM on April 7, 2014 [1 favorite]

Best answer: You need to look at your settlement date, as I understand it. Here's some advice with the exact dates for 2013 from a tax preparing company in Canada. Here's a laywer with a letter from CRA confirming that opinion.

Be careful: a number of sites on the net seem to think that the trade date is ok to use too. However, in Canada, it appears that the CRA has a pretty definite answer. You may want to confirm with them directly. IME, the CRA help line tends to do ok with definite yes/no factual questions, but struggles with more general "how do I do this" inquiries.
posted by bonehead at 8:35 AM on April 7, 2014