drewdalton

RIP Charlie. Thank you for all your wisdom over many years.

Year Book Value Year End PR 1966 $ 33 $ 17.50 1967 39 20.25 1968 44 37 1969 52 42 1970 60 39 1971 68 70 1972 79 80 1973 96 71 1974 100 40 1975 106 38 1976 129 94 1977 205 138 1978 271 157 1979 336 320 1980 401 425 1981 526 560 1982 737 775 1983 976 1,310 1984 1,109 1,275 1985 1,644 2,470 1986 2,073 2,820 1987 2,477 2,950 Norm- I believe the numbers are accurate. I had them written in one of my old annual reports. I hope it helps.

Congratulations Sanjeev. We appreciate all that you do.

Cardboard, That is an excellent question. The best place to start is with Interpretation Bulletin IT-479R- Transactions in Securities, http://www.cra-arc.gc.ca/E/pub/tp/it479r/it479r-e.html Securities transactions will be taxed either as an income gain or loss or as a capital gain or loss. Once a person has "elected" his tax treatment it must be consistently followed year after year. To determine the correct way to treat a short sale we must review paragraph 6, which states, 6. The election under subsection 39(4) is applicable only to "Canadian securities". This term is defined in subsection 39(6) as a security (other than a prescribed security) that is a share of the capital stock of a corporation resident in Canada, a unit of a mutual fund trust (applicable to 1979 and subsequent taxation years) or a bond, debenture, bill, note, mortgage, hypothec or a similar obligation issued by a person resident in Canada. A Canadian security includes such a security that is sold short. The term "a prescribed security" is defined by section 6200 of the Regulations. How I interpret the above is, at least for a Canadian security, a long stock position is treated exactly the same as a short stock position. You only are required to book the gain or loss when you buy back the shares. No "mark to market" is required to be reported at the end of the year. Of course, there is always a fly in the ointment which is paragraph 18, 18. The gain or loss on the "short sale" of shares is considered to be on income account. Regardless of whether you must treat the gain or loss of a short sale as capital or income, this bulletin indicates that you are not required to "mark to market" at year end. Regarding my answer there are no guarantees in life, except death and taxes :)

Happy Holidays everyone. All the best in 2013!

Uccmal, As Roundball stated you should consider discussing these issues with your tax accountant. In Canada, capital gains currently are taxed at an inclusion rate of 50%. In 2000 the inclusion rate was 75%. Since 2001 the inclusion rate has remained at 50% (ie- a $1,000 capital gain is reported as a taxable capital gain of $500). Capital losses have the same inclusion rate of 50%. A net capital loss only can be deducted against a taxable capital gain. A net capital loss, for 2011, can be carried back three years to 2010, 2009, and 2008. Also, a net capital loss can be carried forward indefinitely. Here is CRA's Guide- T4037- Capital Gain 2011. I would take a look at Chapter 5 (pg 30)- Capital Losses http://www.cra-arc.gc.ca/E/pub/tg/t4037/t4037-11e.pdf In your case it sounds like CRA may have made an error in calculating your 2011 net capital losses (ie- instead of allowing you 50% of your net capital loss, CRA only allowed 25%). If this is the case, then you or your tax accountant, should write a letter to CRA and lay out the correct gains and losses by year. In addition to the letter you would file a "T1 Adjustment Request" with CRA. http://www.cra-arc.gc.ca/E/pbg/tf/t1-adj/t1-adj-fill-12e.pdf Also, you would complete a "T1A- Request for Loss Carryback", which simply requests the net capital losses from 2011 be carried back to 2010, 2009 & 2008. http://www.cra-arc.gc.ca/E/pbg/tf/t1a/t1a-11e.pdf You may wish to request that CRA provide you with a list of your past capital gains and losses so that both you and CRA are working with the same numbers. Notice of Objection You only would file a Notice of Objection if you have been audited and you disagree with the results of your audit. In your case it sounds like there has simply been an error on the "keying" of your 2011 return. I went through this same situation with CRA a few years ago. It is a slow process but eventually it gets resolved.

Stahleyp, To the best of my knowledge, here is the income tax treatment and cost basis for the distribution of the Sears Hometown rights: United States The distribution of the rights is considered a stock dividend. The Fair Market Value (FMV) of the rights at the date of distribution (Oct 8, 2012) is about $1.80 / right. This will be taxed as a federal dividend. Upon exercise of the rights the Adjusted Cost Basis (ACB) of one share of SHOS will be: Cost of SHOS $15.00 Plus FMV of Dividend ($1.80 x 4.59) 8.26 ----------- ACB of SHOS $23.26 Upon sale of SHOS, there will be a capital gain OR capital loss depending the price sold (above or below $23.26). Canada The stock dividend is treated as ordinary income (ie- no federal dividend tax credit) because it is a foreign dividend. The ACB for one share of SHOS is still $23.26. Upon sale of SHOS, there will be a capital gain OR capital loss depending the price sold (above or below $23.26). ______________________________________________________________________________ I would think that this tax treatment is being driven by the fact that: 1) Eddie believes the federal dividend tax rate of 15% is going up AND 2) Both Eddie and Bruce Berkowitz reside in Florida where there is no state income tax

Rimm, I agree that the current price of the "rights" has given Sears Hometown a high value. Has anyone received delivery of the rights (SHOSR) in his brokerage account? Has anyone attempted to short the rights against future delivery?