Not sure if others had the same issues, I did a few returns last year and T5008 was loaded with AFR, but I noted a few with $0 cost base, asking the clients they had no idea, and only provided pages of monthly reports. At the end, I found if the stock was converted or exchanged, etc… the ACB would be nil as the brokerage would not bother with the ACB of the original, or something like that. Do you guys bother, spending the time to look into those? Or just take the AFR as accurate, and bring it up to the client, if they don’t bother to provide you the details, just leave it, as they are probably not happy with the extra billable hours on those too
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Any time I come across a zero acb, I request my client contact their advisor.
I did that, but the advisor was basically no help, just said everything would be on the monthly statement, it would be easier too, if it happened during the same year, but sometimes, it happened in prior year, so there was tons of looking. One work around I found was, look up that stock, and see if it was split, converted, exchanged, and assumed that would be the case, and use that price as ACB, but of course, kind of guessing on that, client would always accepted that as ACB, didn’t want to bother with it
I explain to the client that if we file as is (ACB = 0) they may pay more tax than they should. Like @albertenterprises I recommend they get info from their investment portfolio manager, but if they don’t have one, or if the investment company doesn’t track the tax cost, it may require an analysis of the full history of all investment transactions, which may take hours or days or weeks (which I will charge out at $100/hr).
A few times, I’ve had a client approve that work, and provide all the investment history - mostly where it was a small portfolio, and not many transactions. But, once I had to spend about 20 hours entering hundreds of transactions into an Excel template I built to analyze such transactions. (In that case, the tax saving was nowhere near enough to offset my bill, but the client appreciated having the work done, and gaining an understanding of their investment income and assets.)
For the last few years, I don’t even offer to do that work - I don’t have time. I tell the client to find someone else, or demand that their portfolio manager provide the proper info.
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I had one like that - no advisor involved to ask so we decided to rely upon the available "realized G/L report’ rather than the T5008’s. Would have been a 6 figure gain based on AFR, was only 3 figures based the report! Apparently the discrepancy had to do with “short selling” activity…