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Start with the activity statement
Find the payment date, security, gross distribution, withholding tax if any, currency, and whether the amount was paid into cash or reinvested. A distribution is not automatically a portfolio gain, nor is every distribution treated the same way for Canadian taxes.
1. When a distribution is paid in cash
Illustrative example: Your investment account receives a $40 CAD cash dividend. If the statement cash balance rises by $40, include that cash when checking total account value. Do not add the $40 as a new stock position as well.
2. When you reinvest automatically
With a dividend reinvestment plan (DRIP), the payment can be used to buy additional units. Check the new quantity, fractional units where supported, any leftover cash, and the adjusted cost base in your own records. Merely increasing cash without recording purchased units can overstate the balance.
3. Distinguish other distribution types
Some ETFs and trusts pay mixed distributions, including capital gains or return of capital (ROC). ROC often changes adjusted cost base for taxable accounts rather than representing ordinary dividend income. Use the issuer's year-end tax breakdown and your accountant or tax slips for Canadian tax reporting.
4. Reconcile the account total
- Compare the statement’s units and closing cash with the Portfolio account.
- Check the same valuation date and quote currency.
- Check foreign withholding, conversion and cash not yet settled.
- If data is manual, update the cash and holding quantity deliberately; avoid duplicating an imported provider balance.
See why a portfolio total may differ and how foreign currency affects values.
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