Hey BD!

Like you I sold my HOT.un position (in Jan. 2021) but still recvd the deferred distn from March 2020 on 31 Dec. 2021. I contacted the help desk at WealthSimpleTax ... and share their response (as summarized by me) for your benefit. In essence, if - repeat if - the recently received amount is 100% Return of Capital, one could skip the refiling and merely adjust the ACB of HOT.un for the RoC amount. If, however, you sold in 2020, you would then have to refile your capital loss on HOT.un (reduced by the RoC amount). But, if you sold in 2021 (like I did), then the RoC will be reflected in the 2021 filing of capital loss for HOT.un. Clear?

Cheers!

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Thanks for your reply Lobna!
 
I have gleaned 3 take-away messages from your email:
  1. I should wait - which was my original plan - until I receive an amended T5013 for 2020 from my BMOIL broker.
  2. If the amended T5013 displays a changed amount only in the Box pertaining to Return of Capital - as the REIT staff member stated would be the case - then no further action would be required. I had wondered about this, but was concerned that if an amended tax slip was sent to CRA and I did not re-file then I would have a target on my back and CRA would hunt me down. Obviously, if the RoC amount is increased and no other changes are made to the tax slip, there would be no effect on tax liability.
  3. If - and hopefully not - any other amounts are amended on the tax slip, then I am re-assured that I can use your software to do the necessary re-filing.
Thanks again!

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babedinkleman wrote: Yes I sold.....apparently not soon enough.  They really should have just paid it when they were supposed to or recinded it completely.  It was always a pain in the azz to own this to begin with tax wise.....so I guess it's nothing new.
scarface9 wrote: Did you sell your shares? If not, since it's 100% ROC you would just change your ACB. 
But if you sold, I guess you're in for an annoyance of refiling.

babedinkleman wrote: Just saw I received this deferred dividend in my account yesterday......forgot I owned this during that period.  You mean to tell me I have to refile my 2020 taxes for this?  Talk about a royal pain.....my taxes are convoluted enough and I don't need this adding any extra scrutiny when refiling for this piddly amount.  When is this new T5013 going to be issued....I assume within the next month?
CanSiamCyp wrote: .... re the characterization of the deferred distribution - see below.

The not-so-good news: the amount will be included on a revised T5013 form for 2020 and will necessitate a refiling for that year.

The good news: As I anticipated the amount will be 100% Return of Capital so there will be no tax implications. Hopefully, this is clearly communicated to the brokers - so they don't ding us for a 15% IRS WHT.

Both of these comments are only applicable to distributions received in a non-registered account.

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  1. Given the date of record is 31 March 2020 but the distribution was payable on 31 Dec. 2021, will this distribution (in a non registered account) be considered income for 2020 (necessitating a refiling of 2020 tax documentation) or for 2021 (considering the 21 month delay interval)?
RESPONSE:  there were losses in both 2020 and 2021, therefore the distribution payment would be return of capital.  The loss allocation to investors for 2020 would have already been reported on the T5013 for the year.  
 We are working with CDS on the presentation of the T5013 slips but we expect notation to show that this payment is a return of capital (with the distribution record date March 2020 and  payment date Dec 2021 )
 
  1. Assuming that - and please correct me if I'm wrong - the distribution will be 100% Return of Capital (as were the Jan. and Feb. 2020 cash distributions), have Canadian brokers been advised in advance of this so that we can avoid the unpleasant and unnecessary levy of 15% IRW Withholding Tax by brokers on the deferred/delayed distribution?
RESPONSE:  That is correct – 100% return of capital.