At tax time, your broker sends a T5008 — Statement of Securities Transactions — for every security you disposed of in the year. Box 20 shows the “cost or book value” the broker has on file. Many investors treat this as their adjusted cost base and use it on Schedule 3 without checking. This is one of the most common and expensive ACB errors in Canadian investing.
The short answer is no — you cannot trust your broker’s number as a complete ACB, and in several common situations it will be materially wrong.
What your broker can actually track
A brokerage knows exactly what you purchased through their platform. Every buy order, every reinvestment they processed, every commission they charged — all of that is in their system and reflected in their book value.
What they cannot know is anything that happened outside their system: purchases at other brokerages, shares transferred in from elsewhere, ETF distributions that the fund company issued but the broker never applied, or DRIP shares reinvested through a transfer agent rather than the broker itself.
Your legal adjusted cost base must account for all of it. The broker’s book value accounts for none of it except the transactions they processed themselves.
Five situations where the broker’s number is wrong
1. You hold the same security at two or more brokerages
Canadian tax law requires pooling — all shares of the same security across all taxable accounts for the same taxpayer must be averaged together into one ACB per share. Your broker at TD has no visibility into your position at Questrade. Each broker computes their own book value in isolation. Neither figure reflects the correct pooled ACB.
2. You transferred a position between brokerages
When you transfer shares in-kind from one broker to another, the receiving broker typically records book value at market value on the transfer date — not your original purchase cost. Your legal ACB carries the original cost forward through the transfer unchanged. These two numbers can be significantly different, especially for positions held for years before the transfer.
3. The ETF you hold paid return-of-capital distributions
Return-of-capital (ROC) distributions from ETFs reduce your ACB each year by the per-unit ROC amount. These amounts appear on T3 or T5 slips from the fund company, not as transaction entries in your brokerage account. Most brokers do not adjust their book value when ROC is distributed. After three or five years of an ETF paying ROC, the gap between broker book value and your real ACB can be hundreds or thousands of dollars on a meaningful position.
4. You received DRIP shares processed outside the broker
Some DRIP programs — particularly those administered by transfer agents like Computershare rather than by the broker directly — issue shares to the account but the broker does not always record them at the correct cost. Shares received at zero cost or at an inconsistent market value overstate the actual ACB per share. See the DRIP and ACB guide for more detail.
5. The broker never applied historical adjustments
If you bought a stock years ago and it later did a stock split, a return of capital event, or a corporate reorganization, some brokers adjust book value and some do not. The tax consequences vary by event type, and brokers apply them inconsistently.
“Book value” is not “adjusted cost base”
The CRA’s own T5008 instructions describe Box 20 as the “cost or book value as reported by the payer.” The word “adjusted” is deliberately absent. The CRA acknowledges that this is the broker’s internal figure, not a legally computed ACB. You are responsible for calculating the correct adjusted cost base yourself and using that figure on your return.
This matters practically: if your broker’s book value is $8,000 but your real ACB is $11,000, using the broker’s number means reporting a capital gain that is $3,000 higher than it should be. You pay more tax than you legally owe, and the CRA has no obligation to correct it.
How to check whether your broker’s number is right
Start by identifying which of the five situations above apply to your position. If none of them apply — you bought the security at this broker only, never transferred it, it has paid no ROC distributions, and all DRIP shares were processed by the broker — the book value is likely accurate.
If any of them apply, you need to calculate your ACB from the ground up: every purchase, every DRIP reinvestment, every ROC reduction, across every account that has ever held the security.
Use the T5008 ACB reconciliation checker to compare your broker’s Box 20 against your own per-share ACB and see the size of the difference. If the mismatch is significant, it is worth the time to reconstruct the full history before filing.
What the error actually costs
A concrete example: you hold 300 shares of an ETF with a correct pooled ACB of $9,000 across two brokerages, but your broker’s T5008 Box 20 shows $7,500. The gap is $1,500. If you use Box 20 and report a capital gain $1,500 higher than required, the tax on that extra gain at a 46% marginal rate (50% inclusion) is approximately $345. For a single year, on a single position, that is manageable. For an investor with multiple positions held across five years without pooling correctly, the accumulated overpaid tax can reach several thousand dollars.
The error runs both ways. In some cases — particularly where a broker transferred shares in at zero cost or where DRIP shares were recorded at below-market prices — Box 20 may actually be lower than the correct ACB. Using that lower figure reduces the reported gain below what CRA would accept on audit.
A three-step check before you file
Step 1 — Identify the gap risk. For each position sold during the year, ask: Have I ever held this security at another brokerage? Did I transfer shares in? Does this ETF pay return of capital? Have I enrolled in DRIP? If any answer is yes, Box 20 is likely wrong in one direction or the other.
Step 2 — Calculate independently. Start from the earliest purchase of this security in any taxable account. Apply the pooled ACB method — weighted average cost across all purchases and adjustments. Include DRIP shares at their cost basis, ROC reductions from T3 data, and carry-forward cost from any transfers.
Step 3 — Compare and document. If your calculated ACB differs from Box 20, identify the specific reason and note it. Report your calculated ACB on Schedule 3 with supporting records available if CRA requests them. The T5008 ACB reconciliation checker on this site handles the comparison step and lists the most common reasons for each direction of mismatch.
What “your broker’s number is usually accurate” actually means
There is a narrow set of circumstances where Box 20 and your correct ACB will match: you bought the security entirely at this broker with no transfers from elsewhere, you hold it at no other taxable brokerage, the fund has paid no ROC or phantom distributions, and all DRIP shares were processed correctly by the same broker. In that specific scenario, the book value is likely accurate.
That scenario describes a minority of positions for anyone who has been investing for more than a few years across standard Canadian brokerage accounts.
For the year-end workflow inside the product, see T5008 Reconciliation and Reports. For a detailed explanation of why T5008 Box 20 is not your adjusted cost base, including a worked reconciliation example, that post covers the mechanics step by step. For a complete guide to what a proper ACB tracker needs to maintain — from multi-brokerage pooling to ETF adjustments — see ACB Tracker for Canadian Investors. Before submitting Schedule 3, run through the Canadian Adjusted Cost Base Checklist — a step-by-step pre-filing review covering T5008 reconciliation, ETF ROC, multi-broker pooling, DRIPs, USD trades, and transfers.
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.