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Foreign spin-off


jlijli
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I held some IBM shares in 2021, and received some spin-off shares for KYNDRYL.
I only received a T5008 from my broker, which only shows the date and number of units. Does anyone know where I should report it (in Ufile) please?
Thanks a lot!

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IBM recently filed with CRA to have this spinoff qualify under a section 86.1 election. (Or maybe 85.1, I’ve forgotten which one applies here but it’s obvious if you look them up) Making the election allows you to defer income tax until you sell those shares, so that’s usually the better choice in most cases. However, I think you may have to file a paper return to make this election. Be sure to properly calculate your ACB for the new shares, and update the ACB for the remaining IBM ones. See the documents on making this election for the calculations.  If you choose to do this, you omit the 5008 from UFile.

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Thanks a lot for your response John.  That's very helpful.
I would like to file electronically so I will have to report it as foreign dividends.  Since I didn't get a T5, should I report it under "Foreign income or foreign property"-> "Income from foreign dividends" on ufile?
And, my understanding is, if I reported the spin-off as foreign dividend, I will no longer need to adjust the cost base on my IBM and KYNDRYL shares when I sell them is that right?
Thanks again!

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