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| Q | When and how do I report my capital gains? |
| A | Since the flow-through shares purchased by Canada Dominion are deemed to have an adjusted cost base of zero, any shares sold by the manager will be treated as capital gains in the hands of unit holders.
SHARES SOLD IN THE PARTNERSHIP:
Should the manager sell securities with a low ACB while inside of the partnership during the holding period, capital gains will be reported on the T-5013A slip which is produced by brokers and mailed to unitholders (i.e., limited partners) in March of the following year. Should a Canada Dominion partnership realize any capital gains during its life, the amount will be included in the calculation of a limited partner's adjusted cost base (ACB) whereby the ACB on the roll over fund will be adjusted upwards by a corresponding amount, taking into account any dividends, interest, business losses or unamortized issuance costs from the partnership.
SHARES SOLD IN THE FUND:
After the holding period expires, the proceeds of the partnership are generally rolled into the DMP Resource Class, part of Dynamic Managed Portfolios Ltd. Holders of the fund will be assigned an ACB shortly after the transfer of the assets. Should an investor sell their positions in the fund, or use them as a contribution to their RRSP, this would constitute a deemed disposition, where the investor would need to report the capital gains resulting from the transaction in the year of the sale.
Note: Canada Dominion issues I through X would have rolled into the Canada Dominion Resources Fund Ltd., which was merged with the CMP Fund Corporation on December 30, 2004 and renamed DMP Resource Class, a resource-focused mutual fund class available inside Dynamic Managed Portfolios Ltd. |
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