Tax reports for your investment portfolio

Capital gains tax (CGT) is a tariff that investors pay on the profit made from selling an investment. In Canada, 50% of the value of any capital gains are taxable, and will be added to your assessable income. Therefore, the amount of tax you pay on capital gains will vary depending on what other sources of income you have and how much you earn. Please refer to the CRA for more information.

Investors can calculate the capital gains on investments they have sold by calculating the difference between the value of the purchase price (adjusted to include any transaction fees) and the current market value at the point of sale. However, this can be time-consuming and subject to error, especially for investors with a lot of trades.

Canadian investors can automatically calculate the CGT on their investments with Sharesight’s Capital Gains Tax Report, which provides investors with a breakdown of their short-term and long-term capital gains, as well as capital losses.

If you incur a capital gain (or allowable capital loss) on the sale of an investment, then you will need to report your capital gains/losses in your Canadian income tax return. The exception is for capital gains earned in tax-sheltered accounts such as an RRSP or RRIF (unless a withdrawal is made) or a TFSA. For specific advice on reporting capital gains/losses and whether you need to pay capital gains tax, please refer to the CRA rules.

Yes. Dividends are considered taxable income in Canada and must be reported in your income tax return. However, investors may be eligible for a dividend tax credit (for Canadian investments held outside an RRSP, RRIF or TFSA), which will reduce their effective tax rate. Please refer to the CRA for more information about dividend tax credits.

Yes. ETF distribution income is considered taxable income in Canada and must be reported in your income tax return. ETF distributions can include various forms of investment income, such as dividends, capital gains, return of capital, reinvested distributions and foreign income, which can create tax complexity. Canadian investors who hold US ETFs may also find their dividends are subject to withholding tax, which can create two levels of tax consideration. Sharesight makes tax time easier for investors by automatically tracking dividends and distributions, including foreign withholding tax components.

Done manually, calculating taxable income from dividends can be a tedious process, requiring investors to sort through a combination of paper statements and digital statements via multiple share registries. However, Sharesight automates this process by automatically tracking dividends and distributions. Sharesight also makes it easy for investors to calculate the taxable income on their dividends by using Sharesight’s Taxable Income Report. This report displays a portfolio's dividends and interest payments, along with the relevant totals investors need to complete their tax return.

Unrealized capital gains occur when the value of an investment in an investor’s portfolio has increased, however the investor has not sold the investment. This means the gains have not been “realized”. Unrealized capital gains are useful information for investors who want to use tax loss selling (or tax loss harvesting) to minimize their net capital gains during the financial year for tax purposes.

Sharesight’s Taxable Income Report is designed for investors looking for a complete list of the dividends and interest they earned over the time period of their choice. It is a useful tool for investors who need to prepare their tax return, including investors who invest in foreign markets and need a breakdown of their local and foreign dividend income.