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Level 1

How do I fix a T5008 Warning

This is the warning I get ...  "Capital gain (or loss) will be reported in Schedule 3 or investment income will be reported in Schedule 4 from T5008(s) entered.  The amount(s) reported in box 20 may or may not reflect the investor's ACB for the purpose of determining the gain or loss from the deposition of the security.  The investor should be aware that he or she may have to make adjustments to the amount indicated in box 20 at the time of determining and reporting his or her gain or loss from the disposition."


7 Comments
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Level 3

How do I fix a T5008 Warning

This is a normal warning. I get them with every T5008 entry made, even if they are via AFR. What you may need to do is verify with your client that the amount in box 20, which is the ACB of the investment, is the correct amount. I've had T5008 slips with no entry in that box and even one with a totally fictitious entry courtesy of National Bank Financial. This probably isn't relevant to your situation, but the T5008 from them was for an estate of a client who died in 2016 and the ACB was way higher than my client had previously given me for other sales of the same stock holding. The National Bank representative claimed that when the bank didn't know what the actual cost was when they took on a new investment client transferring from another institution, they just entered the FMV of the stock on the date of transfer. That is totally wrong and I've been debating reporting them to IROC.

Long story short, verify the ACB with your client and adjust the T5008 if necessary. Alternatively, you can completely ignore the T5008 and just enter the details on the Capital Gains Entry worksheet (S3Details in the slips module). Come to think of it, I'm working on a file right now which has a duplicated T5008. One T5008 was issued by Templeton (correct) and the second one from National Bank included that Templeton sale in addition to other stock sales. If I wasn't paying attention, my client would be paying tax twice for the same sale.

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Level 1

How do I fix a T5008 Warning

Thank you, client & I are still confused, client was told they wouldn't be taxed
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Level 3

How do I fix a T5008 Warning

If the ACB is higher than the sale of the investment, there will be a capital loss. It should still be reported as capital losses can be carried forward indefinitely.
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Level 1

How do I fix a T5008 Warning

Box 21 is higher than Box 20 therefore they are gains, correct? How does the client make adjustments to the amount indicated in box 20
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Level 3

How do I fix a T5008 Warning

Yes, they have a capital gain. It will now be a matter of finding out why their broker said they wouldn't be taxed. Maybe the records in his office indicate a different ACB than what is in box 20. Maybe there are selling expenses which can be added on the line for "Outlays and expenses". You can over-write what is in box 20 if there is different information, but this needs to be backed up with proper records. Either the client kept accurate records or they'll have to visit their investment advisor and get correct amounts.
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Level 1

How do I fix a T5008 Warning

Thank you ... these T5008 are sure causing headaches ;)
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Level 3

How do I fix a T5008 Warning

You're welcome. And yes, I agree with you about those T5008s