PHG » Topics » Selling Shares

This excerpt taken from the PHG 6-K filed Mar 19, 2008.

Selling Shares

When Participants sell their shares, Canada Revenue Agency (CRA) requires Participants to report these activities on their annual tax return. Any further gain/loss after the purchase of these shares will be taxed as a capital gain or loss.

A capital gain occurs when a Participant sells stock for a higher price than the adjusted cost base of the stock.

A capital loss occurs when a Participant sells stock for a lower price than the adjusted cost base of the stock.

In general, the adjusted cost base of a particular share will be the weighted average purchase price for all the Philips Canada shares owned by a Participant, both within the Participant’s account and outside of it (except for shares held in any trusteed accounts like RRSPs). For example, if the Participant purchased 10 shares for $30.00 in one Participation Period and then purchased 5 shares at $40.00 in the next Participation Period, the adjusted cost base for each share following the second Participation Period would be $33.33 (i.e. [(10 x $30.00) + (5 x $40.00)] ÷ 15).


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