Canadian ETFs reinvest capital gains you never see in cash (a “phantom” distribution that raises your ACB) and return capital that lowers it. Miss them and you overpay tax on every future sale. Sched3 carries a per-fund distribution dataset and applies box 21 and box 42 to your units automatically.
It carries a maintained dataset of per-unit reinvested distributions and return of capital for Canadian ETFs — iShares, Vanguard, BMO, Global X and more.
For each fund you hold, Sched3 computes the box 42 and box 21 impact for the units you owned on the record date and prepares the ACB adjustment.
Accept the adjustment and your cost base updates; the amounts also pre-fill the matching boxes when you assemble your T3 figures.
Sched3 applies each distribution type on its record date and in the right direction, so the running cost base reflects everything the fund did during the year.
Every adjustment links back to the fund, the distribution, and the date it applied — so an accountant (or the CRA) can trace exactly why your cost base changed.
ETF adjustment tracking and the T3 box auto-fill are part of the Active plan.
Manual entry, 1 portfolio, basic ACB & CSV export.
Broker import, superficial loss detection, FX support, splits & DRIPs.
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A phantom distribution is a taxable capital-gains distribution an ETF declares but reinvests instead of paying in cash. You owe tax on it for the year, and it increases your adjusted cost base by the same per-unit amount. Because no cash changes hands, it is easy to miss — and missing it means paying tax again on the same gain when you eventually sell.
Return of capital is not taxed as income when received — instead it reduces your adjusted cost base. Over time this can push your ACB toward zero; once it hits zero, further return of capital is taxed immediately as a capital gain. Sched3 applies box 42 automatically from the fund distribution dataset.
They are reported by the fund provider, typically on the CDS Innovations tax breakdown and your T3 slip, expressed per unit. Sched3 maintains this data for common Canadian ETFs and scales each amount to the number of units you held on the relevant date.
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