RRSP Cost Basis Question

path · Post by **path** » Wed Apr 23, 2008 11:39 pm

When I moved to the US I did not shift the assets around to give them a fresh cost basis.
So I am digging thru my old brokerage statements (thank goodness I kept them) - to establish my RRSP's cost basis when I moved to the US.
I have a quick question on asset cost basis.

I moved to the US in July 2000.
In April of 1999, I had moved my RRSP from one brokerage firm to another brokerage firm.
Therefore all my financial assets were TRANSFERED from brokerage-firm-1 to brokerage-firm-2.
Brokerage-firm-2 used the TRANSFERED asset price (price of asset on day of transfer) as the new cost-basis of my assets - because they did not know what I originally paid while with brokerage-firm-1.
At the time this new cost basis is what was legally used to calculate my foreign content limit for my RRSP.

Can I use the TRANSFERED asset price as my asset cost basis?
OR
Do I have to dig back into the statement from brokerage-firm-1 - to determine this ?

thanks in advance

nelsona · Post by **nelsona** » Thu Apr 24, 2008 8:29 am

transferring assets does not affect their base.

The basis the new broker is listing is incorrect and they probably have literature that notifies their clients of this. In 2001/2 brokerages were encouraging clients to provide them with correct bases. The foreign limit does not strictly go on book value. But IRS does for RRSP purposes.

path · Post by **path** » Thu Apr 24, 2008 11:22 am

hmmm - looks like I have more digging to do.
I do have another question.

To establish the cost basis in US $ :
Do I use the $ exchange rate on the day I moved down to the US
OR
Do I use the $ exchange rate on the day that I purchased each asset ?

If I have total of two holdings in my account
stock1 - purchased jul21 1998
stock2 - purchased jan10 2000
And I moved to the US on july20 2000.

Do I convert the cost basis based on the exchange rate on july20 2000
OR
Do I convert each assest to US $ based on the exchange rate of when I bought them ?

thanks again

nelsona · Post by **nelsona** » Thu Apr 24, 2008 11:37 am

date of purchase.

See why all are advised to move stuff around just before moving?

path · Post by **path** » Thu Apr 24, 2008 1:21 pm

yes - I wish I had done more research before I made the leap.

I am anticipating that I will not have the statements required to establish my cost basis for all my holdings.
I expect that I should have them for 80% of my holdings but I am wondering what I do for those assests that I am unable to establish the official cost basis on.

Any advise on this?

nelsona · Post by **nelsona** » Thu Apr 24, 2008 1:43 pm

All stocks hacve history in some database.

Mutual fund values can be obtained from those firms.

After all, if these weren't held in an RRSP, you would need this info to determine your cap gains!

nelsona · Post by **nelsona** » Thu Apr 24, 2008 1:45 pm

I guess the most conservatuive approach would be to say those assets had ZERO cost basis.

Hope that is incentive enough to dig deeper.[/code]

ski-matic · Post by **ski-matic** » Thu Jan 07, 2010 4:19 am

I was just thinking about something theoretically.

Let's say you made some kind of error.....for example, using the wrong exchange rate, or perhaps just a simple typo or miscalculation. If you don't pick up on it, what are the chances anyone else would? I think it would be very unlikely that IRS/CRA would catch a minor miscalculation in determining a complicated cost basis? I can't imagine they would look into this in as much depth as an individual. Is that not true?