WealthCalculate adjusted cost base with a complete example
The ACB of identical shares or units is one pooled average cost. A partial sale removes part of that cost; it does not automatically select the oldest units.
Published July 17, 2026 · By the WealthWise team · Official sources reviewed
Step 1: average the cost after two purchases
An investor buys 100 units at $20 and pays a $10 commission. Initial ACB is $2,010. The investor later buys 50 units at $24 with a $10 commission, adding $1,210.
| Transaction | Units | Cost added | Total ACB | ACB per unit |
|---|---|---|---|---|
| First purchase | 100 | $2,010 | $2,010 | $20.10 |
| Second purchase | 50 | $1,210 | $3,220 | $21.4667 |
After the second purchase, all 150 units share the same average cost of $21.4667 each.
Step 2: calculate a partial sale
The investor sells 60 units at $30. A $10 selling commission reduces proceeds of disposition to $1,790. ACB assigned to the 60 units is approximately $1,288: 60 × $21.4667.
The illustrative capital gain is therefore $502: $1,790 minus $1,288. The remaining 90 units retain total ACB of approximately $1,932 and the same average cost per unit before any new adjustment.
Return of capital and reinvested distributions
A return of capital shown on a T3 slip generally reduces ACB. If the remaining 90 units have ACB of $1,932 and receive a $90 return of capital allocation, ACB falls to $1,842.
In contrast, a taxable reinvested distribution that purchases new units generally adds its amount to ACB and changes the unit count. If a $45 distribution is reinvested, add that cost once even though no cash was received in the account.
Reconcile exact amounts with tax slips and the fund’s distribution history.
Minimum record to keep
Every purchase
Date, unit count, price, currency and commission.
Every sale
Canadian-dollar proceeds, disposition costs and ACB assigned.
Every adjustment
Reinvestment, return of capital, split and transfer.
Every institution
Pool identical properties held across the relevant personal taxable accounts.
ACB is primarily used for non-registered accounts. Special tax rules, including superficial losses, may require further adjustments.
Deepen the tax record
The worked example complements the general guide and slips issued by financial institutions.
Adjusted cost base in Canada
Understand the general rules and record keeping.
SlipsT3, T5 and T5008 slips
Learn what each slip includes and leaves out.
LossesSuperficial loss rule
Find purchases that may deny a capital loss.
CentreInvestment taxes in Canada
Connect income, capital gains and account types.
Sources and method
Rules, limits and fees change. The primary sources below were reviewed on July 17, 2026. Always verify the official version before acting.
- CRA — special rules and identical properties — average cost and box 42 adjustments
- CRA — adjusted cost base — definition and acquisition expenses
- CRA — tax treatment of mutual funds — reinvested distributions and return of capital
Frequently asked questions
Can I use the T5008 amount as final ACB?
Not automatically. The institution may not know about purchases elsewhere, all adjustments or the full history of identical properties.
Does a sale change ACB per unit for the remaining units?
The sale removes average ACB assigned to units sold. By itself, it generally does not change ACB per unit of the remaining units.
Do commissions belong in the calculation?
Acquisition costs generally increase ACB, while selling costs reduce proceeds of disposition.
Must I calculate ACB in a TFSA or RRSP?
ACB normally supports gains and losses in a taxable account. Cost tracking may still help analytics, but it has a different tax role inside registered accounts.
Separate portfolio return from the tax record
Analyze positions and returns while maintaining a distinct tax record reconciled with official documents.