I’m assuming this is why we are receiving CRA Review Letters instead of Notices of Assessment for T2 returns where we have reported post June 25th capital gains?
In all instances I am receiving review letters suggesting the taxable capital gain on Schedule 1 is not equal to the taxable capital gain on Schedule 6 when in fact the amounts are identical.
I waited to file these T2 returns until the December release of TaxCycle, which purportedly handled the 2/3ds inclusion rate. Now it turns out either the software didn’t handle the 2/3rds inclusion rate properly or the CRA can’t asses the 2/3rds rate.
I don’t know what to do now and I certainly don’t want to spend a bunch of time answering review letters.
{edit}
As my esteemed colleague @justjoe1 pointed out, the review letter threatens to go so far as to consider the T2 return not to be filed. {/edit}
The reason we decided to retract yesterday the last December T2 release is because the CRA asked us to not show the draft form until it is final. Yesterday’s release of TaxCycle T2 will continue to allow you to use 2/3 and in fact, from the software useability perspective, you should notice very little difference.
Just to give you a bit of a background, when TaxCycle S6 was first revised to allow for 2/3 rate in December, new lines in S6 were not permitted to be transmitted to the CRA. So, for that particular return, the CRA does not have all the complete information to be able to reconcile how you arrived at the taxable capital gains figure. So, I can understand why they sent that letter.
What I can share with you is that the CRA is having a system update in January (very very soon but sorry I can’t share the date) and in that update they will be able to accept and process all the new lines in S6. At that point, we will promptly do a mini T2 release to update our S6 so that you can transmit the new lines. At that point, I am expecting that the CRA will no longer (for the most part) send out post assessment review request.
Thanks for the explanation @Steven
I sincerely mean that.
It’s a pre-assessment review, as they won’t even assess these T2 returns. I have more than 1 of them… as I was waiting most of the fall for the TaxCycle release that would allow the reporting of the new 2/3rds inclusion rate… but I guess in hindsight that release did not allow for the reporting of the new rate.
I suppose it’s great that at some point TaxCycle and the CRA will both be able to handle capital gains on a tax return. In the mean time it seems I am the one expected to be responsible for replying to these letters in an attempt to explain the situation to the CRA or else face the consequences of the T2 returns considered not file at all.
