T5008 slip (Statement of Securities Transactions)

What the slip reports

The slip shows the amount paid or credited to you for securities you disposed of or redeemed. The transactions may be on account of capital or on account of income, a distinction the CRA discusses in its transactions-in-securities bulletin. Dealers and others who act as agents or nominees for the seller generally have to file one. Transactions for a person exempt from tax under section 149, which includes registered retirement savings plans, are among those that do not need one, so a sale inside an RRSP will not normally produce one.

Quebec residents may receive a consolidated T5008/RL-18 slip, with the transactions starting on page 3.

Why box 20 is not your gain

The CRA states that the amount in box 20 may or may not reflect your adjusted cost base, and that you must make any needed adjustments when working out the gain or loss. The slip may not know about reinvested distributions, return-of-capital amounts from a T3, a transfer from another institution or a foreign currency conversion. See capital gains for the calculation and the half inclusion rate.

Capital transactions are reported on Schedule 3. Transactions on account of income can go on line 13500 as business income or, for bearer debt obligations, on line 12100 as investment income. Which treatment applies is a question of fact, so do not pick it by default.

An illustrative example

Illustrative example: you sell shares in a non-registered account and the T5008 shows $10,000 in box 20. Your records show an adjusted cost base of $6,000, and you paid $100 in commissions to sell. The gain is $10,000 less $6,100, or $3,900, not $10,000. Half of that is the taxable capital gain, and it appears on Schedule 3 with the sale details. Numbers are illustrative only, with no exemptions or reserves applied.

Common mistakes and what to ask your accountant

The typical errors are reporting the whole slip as income, leaving out a sale because no slip arrived, and forgetting that you must file to report a disposition even if no tax is payable. Money market fund units that trade at a constant fixed price in Canadian dollars are excluded from T5008 reporting, and their income arrives on a T3 or T5 instead. See T3 slip.

Ask your accountant how to rebuild the adjusted cost base across accounts, whether the sale is capital or income, and what to do if a slip looks wrong. Bring trade confirmations, the year-end statements and records of earlier purchases.