BAH!

It's perfectly fine for DM to be selling / buying shares as his goal is, I don't think, to get as many shares as cheaply as possible (my guess is he's already done that!), but to RAISE his ACB. His actions....ie, always buying at higher prices, is the main clue here.

This is important because, in a liquidity event, the higher the ACB, the smaller the tax bill. Let's say, for arguments sake, cuz I'm not exactly sure, that his AVERAGE BUY PRICE is $0.60 for his 12+ M shares. For tax reasons, his ACB, given is actions, might actually be in the 1.50 - 2.00 range (or slightly lower or much higher), so the difference between his actual average cost and his ACB is, for all intents and purposes, TAX FREE!

So, in this example, if the eventual sale price turns out to be, say, $3.50 (and I'm not saying here what it might be, just an example), then DM pays tax on the DIFFERENCE between 1.50 and 3.50, NOT his ACTUAL cost of $0.60. When you have that many shares, the difference can be astonishing.

Additionally, if his ACB is that high and he sells and triggers a loss, the superficial loss rules say that he ADDS this to his ACB (cuz he can't deduct the loss), making his ACB even higher yet.

Just brilliant tax planning is all he's doing...and maybe, just maybe, making a bit of coin doing it.

AND, on a related note, for those Canucks who want to transfer shares into TFSA's or RRSP's for 2013 and think they've triggered a loss, you won't be able to claim the loss on your income tax (no transfers into registered accounts at a loss). You can, however, ADD this loss amount to your ACB, thus raising your own ACB in the process. If you've already contributed at a loss and get pissed cuz you can't claim the loss, DON'T TAKE IT OUT of your TFSA or RRSP....just add to ACB as suggested cuz if you take it out, you lose the contribution room for the year and you still don't get the loss.