Guarantee Fees for Segregated funds

Tax Topics
1

I have a new client this year who holds segregated funds with Desjardin Insurance. She provided me with a letter from Desjardin that includes an amount of $1200 for “Guarantee Fees” and a note that says:

“You are allowed to deduct the guarantee fees paid during the life of your contract as a capital loss. These fees are only deductible in the year during which a guarantee payment is made or when the contract is fully redeemed.”

I got in touch her advisor at Desjardin who tells me the contract was redeemed in 2023 and thus these $1200 fees can be deducted. The client also has T3 slips from Desjardin with amounts totalling $1400 in capital losses but the advisor assures me that the $1200 is additional. There is no income (capital or otherwise) from these funds. I have never seen this before and have no idea where to put these fees on the tax return. Has anyone else had experience with segregated funds and guarantee fees?

Thanks!

2

If they say it’s a capital loss, I would put it on the S3. Sounds like it could be a kind of “outlay” (which normally increases the ACB). If the ACB was zero and the proceeds were zero, all you get is a capital loss equal to the outlay.