Canadian Stocks/old stock certificates - valuing
QUESTION: Thank you for your feedback and assistance regarding my previous questions regarding old stock certificates for Tappit Resources Inc and Mid Canada Copper & Gold held since the 1980's. (see original question and our exchange starting July 10th/subject ďOld stock certificates). As suggested, I contacted the Ontario and Exchange Commission regarding the issue that someone had claimed my shares for Mid Canada Copper and Gold. After, engaging them along a senior manager at CST Trust (the transfer agent), CST has escalated this to Laurel Hill for resolution. So far, Iíve been told that I am the rightful owner and that Laurel Hill now has to go back to whoever claimed my shares, reverse that and that I will receive all that I am entitled to as the rightful owner. More on that later.
The transfer agent (Computershare) has reorganized my shares for Tappit Resources into Creasent Point energy and said they put them in a direct registration/DRS account. I am waiting for the documentation of this account, statement and check for dividends due that the transfer agent has told me has been sent to me. My question is
1. Can I move the Creascent Point Energy shares into the TSFA account I have that has other stocks in it? And if so, what value is applied against my allowable TSFA contribution room?
2. I donít have the actual purchase price I paid for Tappit Resources back in the early 80ís. If I were to sell the Creascent Point energy shares, how do I value the original shares to determine either a loss or gain at the sale ?
ANSWER: Charleye, that is really great news about the Mid Canada shares. I am very glad the OSC stepped up and helped correct the error and forced CST to reissue the shares back to you as the rightful owner. I am curious if others were also deprived of their ownership in the same way. Hopefully the OSC and CST will investigate the situation and try to discover what went wrong in your case, as it should never have happened, especially considering the legal requirements of share reissuance. It could be that someone involved intentionally circumvented the safeguards and may have profited from the change, or perhaps it was just a mistake. Either way, they should investigate and see if others were also harmed.
For the TSFA, I am not an expert on the TSFA, but the rules do allow for in-kind contributions of qualified investments, and since Crescent Point is an exchange-traded security, it should qualify. The fair market value at the time of the contribution should be the value applied against your contribution room, but you have to consider any capital gains or losses in the Crescent Point. If it is above your original Tappit cost, you would have to pay capital gains. If it is below the cost, you can't take the loss. That is why you may not want to transfer in-kind securities and stick to cash.
Because you don't have the actual purchase price for the Tappit, it would be difficult to accurately determine your cost basis and that is another reason why you may not want to use it for your TSFA. Determining the cost basis can be tricky - you should see if you have any records at all from that period. Even if you don't have the original purchase paperwork, old account statements showing your holdings could help you narrow down the date you bought it.
On both these questions, I suggest you consult with a tax expert who can give you more specific guidance and let you know what might be acceptable to the tax authorities regarding a 30+ year cost basis.
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QUESTION: Thank you: The earliest statement I have from Canarim that lists both stocks, is dated June 30, 1982. Would it be acceptable to value the stocks at that point when calculating a loss or gain on a sale?
And how do I find out what they were worth at that time ? Is there a way to value to stocks at that point ?
And thank you so much for your assistance in all this. You provide a great service.
Charley, that statement from Canarim is a good starting point. I suggest you consult with a tax specialist regarding its use for a costs basis. In terms of determining value at that time, the easiest way is to look them up in a newspaper from the next day. Many libraries will have historic copies of the Vancouver Sun or Financial Post that have the stock tables included. The TSX does offer a historic quote look up service, but they do charge for it and the results can take some time. I recommend the library route, either going in yourself or perhaps calling the reference desk to a larger city branch.