Return of capital
Return of capital (ROC) is defined as a distribution received from an investment which is not classified as income but rather as a return of a portion of your investment (capital). These distributions are not taxable. For retail investors, you may receive a return of capital from Income Trusts, Real Estate Investment Trusts (REITs) and mutual funds.
Return of capital for these investments has an impact on your adjusted cost base (ACB). The return of capital amount will be reported to you in Box 42, “Amount resulting in cost base adjustment” of your T3 tax slip
- TD Waterhouse, Return of Capital, viewed February 13, 2014.
- Jamie Golombek, Mutual Obligations – Tax Tips for Mutual Fund Investors, April 28, 2011. Viewed February 13, 2014.
- Canada Revenue Agency, T3 - Statement of Trust Income Allocations and Designations (slip), viewed February 13, 2014.
- Financial Wisdom Forum topic:
- Jamie Golombek, FORUM Magazine, 2006-10-01, Return of Capital