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Return of Capital in TFSA

I have been reconciling the Adjusted Cost Base of my securities against statements from my financial advisor, and inserting a Return of Capital transaction to align the two values. I know the ACB is meaningless in a Tax-Free Savings Account, but I'd still like to see the correct values everywhere. Normally when I enter this transaction in other accounts, I select that same account as the Transfer Account. However in a TFSA, the Transfer Account field is greyed out and cannot be selected.
As a result, the Return of Capital amount changes the cash balance in the TFSA, which I do not want. I could enter a Miscellaneous Income/Expense amount to offset this, but that's starting to get complicated.

Any other workarounds to suggest? Maybe Quicken can explain why this functionality is restricted for TFSA only.

I'm using Quicken 2019 Home & Business Canada R22.29


  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    edited March 2020
    "As a result, the Return of Capital amount changes the cash balance in the TFSA, which I do not want."

    Well, ordinarily a Return of Capital should change the cash balance in the Account, so I'm assuming that the reason you don't want to change the cash balance is that you're learning, after the fact, that some other distribution previously received, a dividend say, actually turns out to be a Return of Capital.  If that's the case then obviously the "dividend" amount, (or whatever), recorded in the Account is wrong, so it's appropriate to reduce the amount of dividends recorded in the Account, offsetting the Return of Capital.
    For what it's worth, if I try to do a Return of Capital in an IRA Account then the "Transfer account field is also unavailable.
  • Chris Sowerby
    Chris Sowerby Member ✭✭
    Thanks, Tom. You're right - I normally use Return of Capital to reflect a distribution in a mutual fund, in which case there is no cash impact. In this case I am actually adjusting the ACB because my investment account shows dividend reinvestment transactions at the current-day market value rather than the actual stock purchase price which is an average over preceding days. It would be a lot of work to look up the true acquisition price for each transaction so I decided to do an annual reconciliation instead. You are completely correct that I should offset the Return of Capital with a reduction (or sometimes an increase) in the dividends paid out by that stock.
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