During the year CI Investmest switched out my funds from Fee based funds and combined them with my non fee based funds within the same Class of funds.
How to report this switching out into the other funds on Form 8621.
Is this considered a sale? Should it be reported in Part IV 13A.
Also I have been converting these Cdn funds to USD based on year end exchange and for the most part because the exchange keeps dropping, it shows a loss is this correct?
How should exchange be treated.
Thank you for your insights
F8621
Moderator: Mark T Serbinski CA CPA
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CdnAmerican
- Posts: 245
- Joined: Tue Aug 30, 2011 12:15 am
I don't know much about the first part of your question (I'd guess it would not be a sale, but I don't know how you'd report it), but I can take a shot at the 2nd part. Yes, many funds would certainly appear to be a loss once the exchange rate is factored in. If you are going mark-to-market on 8621, then you'd still count it as a loss, and include it in "other income" where you put your 2555 info on your 1040. Good luck!
Not a professional opinion.
Hello,
Whether or not to treat as a sale, it would likely be treated the same for US purposes as it is for Canadian purposes. Was the switch considered a disposition for Canadian tax?
What I would do is, if the class of shares is the same, as you said, but with a different fee structure, then you are probably safe not to treat it as a sale. A good test of this is; did the NAV of the shares change as a result of the switch.
A while back, I had Fidelity funds and switched from DSC to ISC (series B to A I think) and this was not considered a switch for Canadian tax purposes.
I'll second what CdnAmerican said - many of us lost on our investments for US tax purposes due to the exchange rate.
I hope this helps.
Whether or not to treat as a sale, it would likely be treated the same for US purposes as it is for Canadian purposes. Was the switch considered a disposition for Canadian tax?
What I would do is, if the class of shares is the same, as you said, but with a different fee structure, then you are probably safe not to treat it as a sale. A good test of this is; did the NAV of the shares change as a result of the switch.
A while back, I had Fidelity funds and switched from DSC to ISC (series B to A I think) and this was not considered a switch for Canadian tax purposes.
I'll second what CdnAmerican said - many of us lost on our investments for US tax purposes due to the exchange rate.
I hope this helps.
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MGeorge is neither an accounting nor taxation professional.
MGeorge is neither an accounting nor taxation professional.