CRA assistance in verifying capital dividend account balances: Update

For taxpayers and tax advisors, keeping track of capital dividend account (CDA) balances is difficult, but crucial for avoiding penalties and other problems. Starting in April 2015, the Canada Revenue Agency (CRA) is making verification easier.

For years, Chartered Professional Accountants of Canada (CPA Canada) has been working with the CRA to find a solution to persistent administrative problems for tax practitioners and their clients related to CDA calculations.

In an earlier article, we described how challenging CDA calculations can be. The amounts are cumulative and can cover many years, and taxpayers and advisors can have difficulty verifying that the calculation is accurate.

Currently, as taxpayers or their representatives, you request information about CDA balances from the CRA. You can also use the Submit Enquiry function in My Business Account to ask the CRA to confirm it received your CDA balance request.

ASSISTANCE COMING IN APRIL 2015

Starting in April 2015, a CDA balance request form will be available on the CRA website. At the same time, you will be able to retrieve capital gains information via My Business Account. The CRA provides the following example of the information that will be available in My Business Account:

Tax Year-End 2011-12-31

  • Allowable Business Investment Loss (ABIL) $88,662
  • Capital Gains or Losses excluding ABIL $1,623
  • Gain on donation of a share, debt, obligation, or right listed on a designated stock exchange and other amounts under paragraph 38 (s.1) $1,624
  • Gain on donation of ecologically sensitive land $1,625
  • Exemption threshold at the time of disposition $10,146
  • Total of all capital gains from the disposition of the actual property $10,143

Tax Year-End 2010-12-31

  • Allowable Business Investment Loss (ABIL) $92,356
  • Capital Gains or Losses excluding ABIL $1,886
  • Gain on donation of a share, debt, obligation, or right listed on a designated stock exchange and other amounts under paragraph 38 (s.1) $1,887
  • Gain on donation of ecologically sensitive land $1,888
  • Exemption threshold at the time of disposition $11,788
  • Total of all capital gains from the disposition of the actual property $11,787
This information will give taxpayers and their advisors some assurance that the taxpayer’s information is consistent with the data on file with the CRA.

Highlights

Gain practical organizational insights and learn from industry experts at this annual event for not-for-profit financial leaders.