What to know about useless tax slips, loss-leading accounts and lagging ETFs
The article discusses common investor confusions around tax slips, brokerage revenue models, and ETF performance discrepancies. It explains that T5008 slips may be automatically generated but not always relevant for tax reporting, especially in cases of deemed dispositions. Brokerages like National Bank may not directly profit from no-fee accounts but use them to attract clients, while ETFs can lag benchmarks due to various operational factors.
- ▪The T5008 Statement of Securities Transactions is often automatically issued by brokerages but may not be relevant for tax reporting in cases of deemed dispositions from RRIF to TFSA transfers.
- ▪National Bank earns most of its wealth management revenue from fee-based services and net interest income, not necessarily from transaction fees on self-directed accounts.
- ▪Brokerages may maintain no-fee accounts to attract clients, even if those accounts are not directly profitable.
- ▪Vanguard ETFs may lag their benchmarks due to fees, trading costs, index turnover, and other operational factors.
- ▪Investors can find details on ETF tracking differences in fund reports, though such information is not always proactively broken down by fund managers.
Opening excerpt (first ~120 words) tap to expand
ShareSave for laterPlease log in to bookmark this story.Log InCreate Free AccountIt’s May! As you slip the surly bonds of the Canada Revenue Agency, confused and bleary-eyed, take a moment to enjoy the outside world and not think about income taxes for a moment.Granted, I write this from Vancouver, where trees are singing and birds are swaying, and a helpful TurboTax employee found additional deductions when I filed. Apologies to readers who are still digging their way out of snowbanks and tax receipts. Following my bemoaning of the T5008 Statement of Securities Transactions slip a few weeks ago, a reader wrote in with what I expect is the season’s final question on the topic (please).
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Excerpt limited to ~120 words for fair-use compliance. The full article is at The Globe and Mail.
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