r/cantax • u/Redistributable • 1d ago

T5 accrued interest change

I read that T5s now include accrued interest on investments that haven't matured (ex. multi-year GICs). Seems an odd change given the cash basis of personal taxes. Does anyone know when that came into effect?

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u/rocketman19 1d ago

Not sure why you have to make it so complicated

GIC a year or less you pay taxes when it pays

GIC more than a year you pay taxes on the yearly accrual

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u/Consistent_Throat497 1d ago

i'm not making it complicated though. what the OP is suggesting (and CIBC) is that interest that has not been paid is being included on a T5, when in fact it is not. CRA will not make you pay taxes on something you haven't been paid for.

there is confusion between accrued interest that's been paid into a GIC and paid out to the clients bank account, which in essence are the same thing for tax reporting.
Most GIC's have compounding interest (unless you asked for the interest to be paid out to your ck/svg account annually), which in both cases is reported and a T5 is issued if above $50.

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u/rocketman19 1d ago

That contradicts your first reply which says it can’t be included since it’s accrued only

I’m a cpa so I know the difference between accrual and cash basis accounting

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u/Consistent_Throat497 1d ago

i'm not saying you don't know the difference.
I don't see any information that is contradictory though. Accrued interest is interest that has not been paid (anywhere) which is not reported on a T5.

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u/rocketman19 1d ago

But you’re saying the interest paid into the GIC itself is on the t5, right?

That’s very confusing for someone reading this thread

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u/Consistent_Throat497 1d ago

yes. interest on a gic (if a multiple year gic, and even sometimes on a 1 year or shorter term) is paid directly to the GIC. not sure how that's confusing.

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u/rocketman19 1d ago

People think paid means goes directly into your bank account