Advertisement
To calculate a capital gain or loss, you must know your investment’s ACB. Here’s the formula for adjusted cost base.
The adjusted cost base (ACB) of an investment is the cost used to calculate your capital gain or capital loss for tax purposes. ACB represents the total cost of the security, including commissions and certain other costs. For example, if you buy 10 shares of a $20 stock for $200 and pay a $19 commission, your ACB is $219. Note, however, that for real estate such as secondary residences or rental income properties, the ACB does not include current expenses (e.g., maintenance and repair costs).
ACB = Investment-related costs + cost of the investment
Calculating your adjusted cost base is more complicated for shares acquired through dividend reinvestment plans (DRIPs) or corporate actions like stock splits. These occurrences change your ACB for a stock, so you’ll need to keep track of the timing, the number of shares and the value of each transaction.
Example: “Because the Canada Revenue Agency requires taxpayers to report in Canadian dollars, investors who trade in U.S. or other foreign-denominated securities should keep track of their adjusted cost base in Canadian dollars on the date of each transaction.”
Share this article Share on Facebook Share on Twitter Share on Linkedin Share on Reddit Share on Email
Which ETFs should you invest in? Which ones best suit your risk tolerance? What about personal ethics? Check out...
The Trump effect and Trumponomics, Shopify’s huge earnings beat, it’s sunny days for Suncor shareholders and more.
Here’s how to get your free ticket to attend two MoneyShow virtual expos.
Should you be paid as a power of attorney? Learn about the compensation rules in Ontario and how to...
The oilsands giant will return all excess cash to shareholders after hitting debt target early.
You started investing in your 20s, and you feel pretty good about doing it. But now what? Consider impact...
Shopify reports third-quarter net income of USD$828 million, and its executives aren’t concerned about how Trump’s election win will...
Here are the best accounts to hold your savings and investments.
Want an idea of how much tax you paid—or will be paying—for 2024? Here are the federal and provincial...
