How to enter year end Return of Capital, Cap Gain Distributions (Canada) ?

justmakeitwork
justmakeitwork Member ✭✭
edited January 14 in Investing (Windows)
How do you enter Canadian year end adjustments for items such as Return of Capital, Cap Gain Distributions?

Entering the Return of Capital, or Capital Gains Distributions would be straight forward if they were reported at the time when the distribution is paid out. However, many of the ETF's pay out dividends in the year and then you don't know the breakdown until the end of the year when you get a T3 Income Summary or similar document.

This is how I currently do it for a single investment.

1) Throughout the year enter all transactions as dividends
2) When then Income Summary arrives, the following transactions adjustments are made on Dec 31st:

iShares S&P Div (CDZ) ETF - Return of Capital $ 10
iShares S&P Div (CDZ) ETF - Capital Gain $ 300
iShares S&P Div (CDZ) ETF - Dividend ($ 310)

It is this last adjustment transaction I am not sure about. Is this the recommended way to handle this transactions?

Best Answers

  • MontanaKarl
    MontanaKarl Member, Windows Beta, Mac Beta Beta
    Answer ✓
    It is hard to tell from your post if you made that dividend a negative... to offset the previously-received dividends.  If entered as a negative, then your totals for the year should report correctly after making these three entries... or a single adjusting transaction that is a split with the three entries...netting zero.
    Quicken Windows and Mac subscription • Quicken user since 1990
    iMac Pro, macOS Ventura 13.2 • Windows 10 via Parallels Desktop 17
  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    Answer ✓
    That's exactly the way I've been dealing with RtrnCap transactions for years.  When the 1099s (US tax informational returns) start arriving in late January through the end of February, that's when I make my entries "as of" 12/31 of the prior year:

    This works in the other direction too when you need to increase the dividends reported:


Answers

  • MontanaKarl
    MontanaKarl Member, Windows Beta, Mac Beta Beta
    Answer ✓
    It is hard to tell from your post if you made that dividend a negative... to offset the previously-received dividends.  If entered as a negative, then your totals for the year should report correctly after making these three entries... or a single adjusting transaction that is a split with the three entries...netting zero.
    Quicken Windows and Mac subscription • Quicken user since 1990
    iMac Pro, macOS Ventura 13.2 • Windows 10 via Parallels Desktop 17
  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    Answer ✓
    That's exactly the way I've been dealing with RtrnCap transactions for years.  When the 1099s (US tax informational returns) start arriving in late January through the end of February, that's when I make my entries "as of" 12/31 of the prior year:

    This works in the other direction too when you need to increase the dividends reported:


  • Perfect, thank you @Tom Young I was wondering if others had taken this approach. Some of the securities have adjustments for Capital Gains, Return of Capital, Foreign Income, Foreign Income Taxes Withheld, and I am sure there are more. I just with these could be auto entered
This discussion has been closed.