Foreign Dividend (Kinder Morgan) with Return of Capital Component
I have just found out that Kinder Morgan on a regular basis since their 15 May 2018 dividend has included with their dividends a return of capital component. Just realised code 37 on the US 1042-S return means return of capital.
My question is how do I fix the parcels to which those dividends relate as each of those parcels (plenty because I also have DRP) need their tax cost base reduced by the return of capital for all dividends since May 2018. (Similar to the deferred tax adjustments / AMIT cost base adjustments).
Also, on an ongoing basis how do I deal with the return of capital to ensure the correct parcels are updated (similar to the EOY distribution components process). There doesn't seem to be this option with processing the dividends.
-
Hi Ann,
Based on what you have written, it is likely that you will need to create a 23800 account for the investment to record the return of capital to adjust the CGT cost base.
You should be able to add a 23800 line to a transaction with a credit of $0 and enter the required adjustments in the more details section.
You may need to re-open prior periods and amend tax returns to get back to transactions from 2018.
I hope the above answers your question and if there are any further questions please reply to let me know so I may assist further
0 -
Thanks Christopher. How does processing this way update the individual parcels correctly as do the Distributions when processing Tax Deferred or AMIT adjustments?
Or will this process result in the same outcome?
0 -
Hi Ann,
This method will adjust the CGT cost base of each parcel based on the weight of each parcel (for example, a parcel that has 50% of the total amount of units held will receive 50% of the adjustment).
If this doesn't lead to the desired outcome, I recommend lodging a support call with BGL's support team so they can assist further.0 -
Thank I will try and see if it gives me the right result
0
Please sign in to leave a comment.
Comments
4 comments