Many Canadian investors assume their broker’s book value or the cost figure in T5008 Box 20 is their adjusted cost base. This assumption is understandable — the broker has a record of every trade in the account — but it is often incorrect. The mechanics of Canadian tax law create several situations where broker book value and legal ACB must diverge.
Understanding the difference, and knowing how to reconcile your records, is the key step before filing Schedule 3 each year.
What broker book value means and how it is calculated
Broker book value (also called “average cost” in some brokerage interfaces) is the average cost of the securities held within a single account at that brokerage. It reflects:
- The purchase price of shares bought within that account
- Commissions paid on those purchases
- In some cases, DRIP reinvestments within that account
- In some cases, the transfer-in value the broker recorded when you moved shares from another institution
What broker book value does not reflect:
- Shares of the same security held at other taxable brokerages
- The original cost of transferred shares (brokers often book transfers at market value, not original cost)
- Annual ETF return-of-capital adjustments (these reduce ACB; brokers rarely apply them)
- Phantom income distributions that should increase ACB
- The pooled weighted average required by CRA across all taxable accounts
The T5008 slip your broker issues at tax time reports this account-local book value in Box 20. CRA’s guidance is explicit: Box 20 represents the issuer’s records and may not equal your correct ACB.
What adjusted cost base means and why it differs
Adjusted cost base is the weighted average cost of a security calculated across all taxable (non-registered) accounts for the same investor, adjusted for every event that changes cost over the life of the holding.
The Income Tax Act requires investors to maintain their own ACB records. CRA does not require a specific format, but it requires you to be able to support any capital gain or loss you report.
The difference between broker book value and ACB is not a technicality. For investors with multi-brokerage portfolios, long holding periods, ETF distributions, or DRIP participation, the difference can be thousands of dollars — and using the wrong figure produces an incorrect capital gain on Schedule 3.
For the formula and worked calculation examples, see How to Calculate Adjusted Cost Base in Canada.
Five scenarios where book value and ACB diverge
Scenario 1: You hold the same security at two brokerages
CRA requires the pooled weighted average across both accounts. If you bought 100 shares at Questrade for $50.00 and 50 shares at Wealthsimple for $60.00, your ACB per share is:
(100 × $50.00 + 50 × $60.00) ÷ 150 = $53.33 per share
Questrade’s book value: $50.00 per share. Wealthsimple’s book value: $60.00 per share.
Neither is correct for CRA purposes. Neither brokerage knows the other’s trades.
Scenario 2: You transferred shares between brokerages
When you transfer shares from Questrade to Wealthsimple, for example, Wealthsimple may book the shares at their market value on the transfer date. If you bought those shares for $40.00 per share and transferred when the market price was $65.00, Wealthsimple’s book value becomes $65.00. For ACB purposes, the correct cost is still $40.00 per share — the original purchase cost carries through unchanged.
This scenario creates a significant overstatement in Wealthsimple’s book value, which would understate your capital gain on eventual sale. Using the wrong figure benefits you in the short term but creates a reassessment risk if CRA compares your original purchase records.
Scenario 3: ETF return-of-capital distributions
ETFs that pay return-of-capital distributions require you to reduce your ACB each year the distribution occurs. Brokers do not routinely apply these adjustments to their internal book value. After five years of annual $0.20/unit ROC on a 500-unit position, your ACB should be $500.00 lower than your original purchase cost. Brokers will typically still show the purchase cost.
For the full mechanics, see ETF Return of Capital and Adjusted Cost Base.
Scenario 4: DRIP reinvestments from a transfer agent
Some DRIP programs are administered by the company’s transfer agent (e.g., Computershare) rather than the brokerage. Shares issued through transfer-agent DRIP may not appear in the broker’s transaction history, or they may be recorded inconsistently. If your ACB ledger does not include these shares, your cost pool is understated and your capital gain at sale will be overstated.
Scenario 5: Historical cost across different brokerage generations
Many Canadian investors have held positions through multiple brokerage relationships — an account at a discount broker that was acquired, an employer stock plan that settled at a custodian, shares inherited from a deceased parent. Each transition may have reset the broker’s book value at market value rather than carrying the original cost forward. Your legal ACB is the original purchase price plus allowable adjustments, regardless of what a broker recorded at a transfer date.
Broker-specific notes: Wealthsimple, Questrade, and Interactive Brokers
These notes are general observations about how each broker’s reported figures relate to CRA ACB requirements. They are not criticisms — every brokerage faces the same structural limitation: they can only see their own transaction history.
Wealthsimple
Wealthsimple’s “average cost” displayed in the portfolio view and its T5008 Box 20 figures reflect shares held within Wealthsimple accounts. Wealthsimple does not have visibility into positions held at Questrade, IBKR, or other institutions. For investors who split a portfolio across Wealthsimple and another broker, the Wealthsimple figure cannot produce the pooled ACB.
Wealthsimple users frequently see GSC-type confusion because Wealthsimple’s average cost figure looks authoritative — it appears prominently in the mobile interface. But it is account-local, and in a multi-brokerage situation it is the wrong number to use on Schedule 3.
Questrade
Questrade provides detailed transaction history and T5008 slips with Box 20 figures. Like all brokers, Questrade’s book value is account-local. Questrade’s figures are generally reliable for single-brokerage investors who have not transferred shares in from other institutions and hold only stocks (not ETFs with distribution adjustments).
For Questrade users with a history that includes transfers in from another brokerage, the post-transfer book value at Questrade may reflect the market value on the transfer date, not the original acquisition cost. Verify with your transfer-in confirmation documents.
Interactive Brokers (IBKR)
IBKR is commonly used by more sophisticated Canadian investors — those with larger portfolios, USD-denominated holdings, options positions, or international holdings. Several IBKR-specific ACB complications are worth noting:
Currency conversion: IBKR applies its own FX conversion rates to convert USD positions to CAD in its reporting. These rates may differ from the Bank of Canada daily rate required by CRA. For each USD purchase and sale, Canadian investors must use the Bank of Canada rate on the trade date — not IBKR’s conversion. The IBKR cost basis displayed in CAD may therefore differ from your correct CRA-compliant ACB in CAD.
Mark-to-market accounting: IBKR uses a mark-to-market accounting model for its internal reporting. This does not align with the Canadian tax weighted-average cost method. IBKR’s “cost basis” in its performance reports should not be used directly for Canadian tax purposes.
Multi-currency accounts: Investors holding both USD and CAD positions in the same IBKR account need to track USD positions at trade-date Bank of Canada rates, not IBKR’s converted figures. See How to Use Bank of Canada FX Rates for Canadian Capital Gains for the lookup procedure.
T5008 reporting: IBKR issues T5008 slips for reportable transactions. As with all brokers, Box 20 reflects IBKR’s internal book value — not the pooled weighted-average ACB that CRA requires.
What T5008 Box 20 reports and when to use it
T5008 Box 20 contains the issuer’s (broker’s) cost or book value for the securities described in the slip. CRA’s guidance is that this is informational: it represents the broker’s records and may not equal your ACB.
When Box 20 is reliable: single-brokerage history with no transfers in, no ETF distribution adjustments, no DRIP from outside the broker, and the full holding period covered by one account.
When Box 20 is not reliable: multi-brokerage position, transfer history, ETF with ROC or phantom income, or any situation where the broker did not have visibility into the full history.
Always file Schedule 3 using your own ACB calculation. The T5008 is a reference document — not your calculation. For the distinction between Box 20 and Box 21, see T5008 Box 20 vs Box 21.
CRA’s position on who is responsible for ACB
The Income Tax Act places the ACB tracking obligation on the taxpayer. CRA does not expect brokers to maintain pooled ACB across institutions. When CRA audits a capital gain, the supporting records they expect are:
- Purchase confirmations for every transaction
- Transfer records showing original cost carried forward
- Annual distribution records for ETF adjustments
- FX rate documentation for USD transactions
- A ledger showing the ACB calculation at each step
Brokers are responsible for issuing T5008 slips accurately based on their own records. Investors are responsible for calculating the correct ACB using the complete picture across all accounts.
Pre-tax-filing reconciliation checklist
Before filing Schedule 3 each year:
For each security you sold:
- Confirm whether you held the same security at another taxable brokerage at any point
- Confirm whether shares were ever transferred between brokerages
- Confirm whether the ETF paid return of capital (check T3 Box 42)
- Confirm whether the ETF had reinvested capital gains distributions (phantom income)
- Confirm whether you participated in DRIP for this security
- Compare T5008 Box 20 against your own ACB calculation
- Use your ACB, not Box 20, on Schedule 3
For any security where Box 20 and your ACB differ, note the reason in your records. If Box 20 is higher than your ACB (a common result of untracked ROC adjustments), your correct gain will be larger than Box 20 implies — and you should report the correct, higher gain. Using Box 20 understates the gain and creates a reassessment risk.
How to reconcile broker data against ACB records
The T5008 ACB reconciliation checker lets you enter Box 20 and your own ACB side by side to see the discrepancy before you file. It is useful for identifying which positions have meaningful differences and understanding the tax impact.
For the full reconciliation workflow — including how to handle multi-brokerage pooling and how to apply missed ETF adjustments retroactively — see Can You Trust Your Broker’s Adjusted Cost Base? and Pooled ACB Across Multiple Brokerages. For a comprehensive step-by-step pre-filing checklist covering T5008 reconciliation, ETF ROC, multi-broker pooling, DRIP, and USD trades, see the Canadian Adjusted Cost Base Checklist.
myCostBase maintains the pooled ledger automatically: add each account (Wealthsimple, Questrade, IBKR, or any other), enter or import transactions, and the system pools identical securities across all taxable accounts, applies ETF adjustments, and reconciles against T5008 at year-end.
This article is for general educational purposes only and is not tax, legal, or financial advice. Adjusted cost base calculations depend on your complete transaction history and personal circumstances. Consult a qualified tax professional for advice specific to your situation.