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Hi Allan!
Could you please help me with one question?
I invest through my CCPC and some of the stocks are REITs that pay distributions, not dividends.
Once a year, around March, they report that last year distributions were X% capital gains, Y% return on capital and Z% other income. Each year X, Y and Z are different.
The problem is, my CCPC tax year end date is August 31, not December 31 like most companies, thus I need to report those distributions in my taxes for current year, but REIT is not willing to tell me that until March next year.
Questions is, what should I do in this situation?
Thank you!
This is a very common problem. You have two options:
1) Prorate the amounts reported on the tax slips issued by the REITs for 9 months of the year (Jan to August). Included the prorated amount in your company's income.
2) Report the previous year's tax-slips (e.g. December 2018) on the current year's corporate tax return (e.g. August 2019). You will be 1 year behind, but this is a timing issue.
Option 1 is the technically correct approach, but if the amounts are not material, then select Option 2.