The following provides answers to general tax related questions our investors often have with respect to their investment. Please be reminded that Jov Flow-Through does not keep tax information on each individual investor. Investors are encouraged to contact their own investment advisor or their tax consultant for further advice on their investment.
When will my T5013A tax slips be mailed out?
In January and February of each year, Jov Flow-Through gathers from the oil and resource companies in which it invests, the tax information from their exploration and development activities. The information is then forwarded to your investment advisor’s back office in order for them to prepare the T5013 tax forms for mailing to you. The T5013 should be mailed to you on or before March 31st of each year. These tax slips will be mailed out directly to you from your investment dealers head office. For further information on claiming the flow-through tax deduction and applicable tax credits with respect to your investment please see Tax Reporting 2010.
What is my adjusted cost base (ACB)?
The adjusted cost base or “ACB” of a share is generally what you paid for it. However, as an offset to you realizing the significant tax deductions from investing in flow-through shares, you are deemed to have an ACB of nil, due to the receipt of the tax deductions equal to approximately 100% of the amount you invest. A nil adjusted cost base means that when you calculate your capital gains on the disposition of your mutual fund shares, you treat your adjusted cost base as zero. To calculate your adjusted cost base, please contact your investment advisor.
Why do I have a capital gain on my investment?
When you invest in flow-through shares you receive a tax deduction of up to 100% of your investment. The adjusted cost base of the investment portfolio is set to $0. A capital gain will occur if portfolio investments are sold. A portfolio manager will typically make adjustments to the portfolio to enhance returns, lower risk or to re-invest into higher quality stocks. The partnership's capital gains are allocated to the unit holders on a proportionate basis.
Why do I continue to receive tax deductions after the limited partnership is wound up?
Initial offering expenses such as printing, selling commission, legal, audit, office expenses and certain other costs are deductible over a five-year period beginning at the time such expenses are incurred for the purposes of the Income Tax Act, regardless of the fact that the Limited Partnership’s life is less than five years. For a complete list of these estimated issue costs, please visit our tax reporting page.
