WealthACB — Adjusted Cost Base
The ACB (Adjusted Cost Base) is the weighted average cost of your investments for Canadian tax purposes. It's the basis for calculating your capital gains or losses to report to the CRA.
ACB Formula
ACB = (Total purchase cost + commissions + fees) / Total quantity
When you buy in multiple lots, ACB is recalculated each purchase (weighted average).
Concrete example
- Purchase 1: 100 shares @ $50 + $5 commission = $5,005 for 100 shares
- Purchase 2: 50 shares @ $60 + $5 commission = $3,005 for 50 shares
- Total ACB: ($5,005 + $3,005) / 150 = $53.40/share
Superficial Loss Rule
If you sell at a loss and repurchase the same security within 30 days, the loss is denied and added to the new ACB. CRA anti-avoidance rule.
USD → CAD conversion
For US securities, ACB must be in CAD. Convert each transaction at day's Bank of Canada rate. WealthWise automates this.
Frequently Asked Questions
Does ACB apply in a TFSA?
No. TFSA being tax-free, ACB doesn't matter for tax. But useful for tracking returns.
How does CRA verify my ACB?
CRA can audit. Keep broker statements + ACB calculations for at least 6 years.
Do dividends affect ACB?
Reinvested dividends (DRIP) increase ACB. Cash dividends don't affect ACB.
How to calc ACB after stock split?
Divide ACB per share by split ratio. Example 2:1 split: ACB/share ÷ 2.