IPOs tax implications

[PeteH]

Hi,

As topic name - was wondering how does one report gains/losses from IPOs from shares? 

Thanks,

[Geo123]

Hello PeteH,

Initial Public Offerings (IPOs) are subject to capital gains and losses.

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-12700-capital-gains/completing-schedule-3/publicly-traded-shares-mutual-fund-units-deferral-eligible-small-business-shares-other-shares/tax-treatment-mutual-funds/you-calculate-your-capital-gains-capital-losses.html

1. On the left side menu on the "Interview " tab, select "Interview setup".

2. On the right-hand side of the screen, go to the "Investment income and expenses" group, check for "Capital gains (or losses) and capital gain history" and click on "Next" at the bottom of the page.

3. Return to the left side menu on the "Interview " tab, select the topic "Capital gains (or losses) & ABIL".

4. On the screen to your right, choose the option that applies to your situation and enter the information about the transaction. It is mandatory to indicate the "Date of disposition" as well as the "Total proceeds from sale", you should specify the ''Adjusted cost base of shares or property'' as you enter the cost of the ''Expenses incurred in making the disposition''.

5. Also, if you have requested a ''Reserve on disposition'' you must specify it.

The net capital gain or loss will be reported by the program on Schedule 3 of the federal returns and, if applicable, on Schedule G of the Quebec returns.

The capital gain will be reported on line 12700 of the federal return and Quebec residents to line 139 of the Quebec return.

If you have incurred a loss, this will be recorded on both the federal and Quebec notices of assessment.

For more information on capital gains and losses, consult the following links:

For the CRA:

https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4037.html

For Revenu Québec:

https://www.revenuquebec.ca/en/online-services/forms-and-publications/current-details/in-120-v/