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60 terms shown
A
- Adjusted cost base (ACB) ACB and accounts
- The running Canadian-dollar cost of capital property for tax purposes. It generally starts with the purchase price and acquisition costs, then changes as events such as additional purchases, return of capital, and reinvested distributions occur.
- ACB pool ACB and accounts
- The combined cost and quantity of identical property owned by one taxpayer in taxable accounts, even when the holdings are spread across brokerages.
- Affiliated person Gains and losses
- A defined group under Canadian tax law that includes a taxpayer, their spouse or common-law partner, and a corporation controlled by either of them.
- Allowable capital loss Gains and losses
- The portion of a capital loss that is included in income for tax purposes, determined by applying the inclusion rate for the year to the total capital loss.
Why it matters
A capital gain or loss cannot be calculated correctly without the ACB assigned to the property disposed of.
Why it matters
Calculating a separate average at each broker can produce the wrong gain or loss when the same property is held in more than one account.
Why it matters
A purchase by an affiliated person — not just the original seller — can trigger the superficial loss rule, including a spouse's independent purchase in an unrelated account.
Why it matters
An allowable capital loss can offset taxable capital gains in the current year or be carried backward or forward to other years. The inclusion rate is set by Parliament and can change.
B
- Bank of Canada daily exchange rate Currency
- A daily average rate published by the Bank of Canada showing the Canadian-dollar value of one unit of a foreign currency on a business day.
- Book value ACB and accounts
- The cost figure recorded by a financial institution for a holding. It may be close to ACB, but it can omit activity the institution cannot see, including another brokerage's purchases or missing historical adjustments.
- Brokerage account ACB and accounts
- An investment account held at a financial institution (brokerage) that can buy, hold, and sell securities. Brokerage accounts can be registered (RRSP, TFSA, etc.) or taxable (non-registered).
Why it matters
Using transaction-date rates preserves the Canadian-dollar cost and proceeds of foreign-currency investments instead of hiding currency movement inside one annual conversion.
Why it matters
CRA guidance says the cost or book value in T5008 Box 20 may or may not equal the ACB needed to report a disposition.
Why it matters
For ACB pooling and capital-gains reporting, identical property held across multiple brokerage accounts must be combined into one pool if the accounts are taxable and held by the same taxpayer.
C
- Capital gain Gains and losses
- The positive result when proceeds of disposition exceed the property's ACB plus the outlays and expenses connected with the disposition.
- Capital gains reserve Gains and losses
- A mechanism that lets a taxpayer defer including part of a capital gain in income when proceeds are receivable over future years, such as an installment sale, subject to maximum reserve periods set by the Income Tax Act.
- Capital loss Gains and losses
- The negative result when proceeds of disposition are less than the property's ACB plus the outlays and expenses connected with the disposition.
- Capital loss carry-forward Gains and losses
- A capital loss that exceeds capital gains in the current year and can be carried backward three years or forward indefinitely to offset taxable capital gains in other years.
- Canada Revenue Agency (CRA) Slips and reporting
- The federal agency responsible for administering Canadian tax law, including the rules for adjusted cost base, capital gains reporting, and T5008 slip requirements.
- Cash account ACB and accounts
- A type of brokerage account in which securities must be paid for in full when purchased and sales proceeds remain unsettled for a standard period (typically two business days).
- Cost basis ACB and accounts
- A general investing term for the cost assigned to an asset. For Canadian capital-property reporting, the required figure is the adjusted cost base after applicable additions and reductions.
- Corporate action Transactions and adjustments
- A company-initiated event affecting shares held by investors, such as a stock split, consolidation, dividend, rights offering, or spinoff. Each type has different tax and ACB implications.
- Cost carry-forward Transactions and adjustments
- The original adjusted cost base that must be transferred when a security is moved between brokerage accounts. The carrying broker may not have this information and may assign a new book value.
Why it matters
The gain is the starting amount used to determine the taxable capital gain reported for the year.
Why it matters
A reserve changes when a gain is reported, not the ACB or the gain amount itself — it is a Schedule 3 reporting adjustment outside the day-to-day ACB ledger.
Why it matters
An allowable capital loss can generally offset taxable capital gains, subject to rules such as the superficial-loss restriction.
Why it matters
Tracking capital loss carry-forwards requires accurate ACB calculations and careful records of denied superficial losses, as these affect how much loss is available to use in future years.
Why it matters
CRA's rules and guidance, including Interpretation Bulletins and Income Tax Folios, define what ACB is, how it must be calculated, and what records you must keep for tax-year reporting.
Why it matters
Both cash and margin accounts are taxable accounts subject to the same ACB pooling rules, but their account structure can affect the timing of when transactions are recorded and settled.
Why it matters
A broker field labelled cost basis should not be assumed to be the investor's complete Canadian ACB without reconciliation.
Why it matters
Corporate actions change the share count or structure without a direct investor sale, so ACB must be adjusted to maintain the same total pool cost spread across the new share count.
Why it matters
For ACB pooling accuracy, the original cost must carry forward across brokerage transfers — the receiving broker's book value reflects only what it can see and is not sufficient for tax reporting.
D
- Deemed disposition Gains and losses
- A disposition the Income Tax Act treats as having occurred even though no actual sale took place — common triggers include death, emigration from Canada, and certain trust transfers. The ACB and fair market value at the deemed disposition date determine the resulting gain or loss.
- Disposition Gains and losses
- An event that transfers property, or is treated by tax law as transferring it, such as a sale or certain in-kind transfers.
- Dividend reinvestment plan (DRIP) Transactions and adjustments
- An arrangement that uses a cash distribution to purchase additional shares or units, often automatically. In a taxable account, each reinvestment is another acquisition that adds units and cost to the ACB pool.
Why it matters
A deemed disposition still needs an accurate ACB at the trigger date, even though no brokerage trade confirmation exists to document it.
Why it matters
A disposition is the event that generally turns a change in value into a realized capital gain or loss.
Why it matters
Leaving small DRIP purchases out of a long-term ledger can understate ACB and overstate the gain when the investment is sold.
F
- FHSA (First Home Savings Account) ACB and accounts
- A registered plan that allows Canadian first-time home buyers to save tax-free for a down payment on a principal residence. Contributions are tax-deductible and gains are not taxed.
- Foreign-currency transaction Currency
- An acquisition, disposition, fee, or other event stated in a currency other than Canadian dollars. Each relevant amount must be translated to CAD for Canadian capital-gains reporting.
- Fair market value (FMV) Transactions and adjustments
- The price at which an investment would sell between a willing buyer and seller on a given date, neither party being under compulsion to buy or sell.
Why it matters
An FHSA is a registered account, so dispositions inside the plan are not subject to capital-gains tax. FHSA holdings are outside the taxable ACB pool tracked by myCostBase.
Why it matters
The acquisition and disposition can use different exchange rates, so currency movement can change the Canadian-dollar gain even when the foreign-market price barely moves.
Why it matters
FMV is used to determine the ACB of reinvested distributions, the proceeds of deemed dispositions, and the cost basis of securities transferred between accounts.
I
- Identical property ACB and accounts
- Property that is the same in all material respects, so one unit cannot be distinguished from another for the relevant tax rule.
- Inclusion rate Gains and losses
- The fraction of a capital gain that is included in income as a taxable capital gain under the rules applying to the taxpayer and tax year.
- In-kind transfer Transactions and adjustments
- Moving an investment without first selling it for cash. A transfer between taxable brokerage accounts normally continues the existing ACB, while a transfer into a registered plan can create a deemed disposition.
Why it matters
The concept determines which holdings share an average-cost pool and which repurchases can participate in the superficial-loss test.
Why it matters
The full economic gain and the amount included in taxable income are not the same figure, and the applicable rate should be confirmed for the reporting period.
Why it matters
A receiving broker may display a new book value even when the original taxable cost history must continue.
M
- Margin account ACB and accounts
- A type of brokerage account that allows investors to borrow money from the brokerage to purchase securities, using existing holdings as collateral.
Why it matters
Margin accounts are taxable accounts and subject to the same ACB pooling rules as cash accounts. Interest on borrowed funds is generally not deductible for capital-gains reporting.
N
- Non-registered account ACB and accounts
- A taxable investment account that is not governed by a registered-plan shelter such as an RRSP, TFSA, FHSA, or RESP.
Why it matters
Dispositions in the account can produce reportable gains or losses, and identical property held across the taxpayer's taxable accounts must be considered together.
O
- Outlays and expenses Gains and losses
- Costs directly connected with disposing of property, such as a selling commission or redemption fee. They are deducted along with ACB when calculating the gain or loss.
Why it matters
Omitting eligible disposition costs can overstate a capital gain or understate a capital loss.
P
- Phantom distribution or reinvested capital gain distribution Transactions and adjustments
- A taxable fund distribution that is reinvested rather than paid to the investor as cash. The reinvested amount generally increases ACB because it has already been allocated for tax purposes.
- Principal residence exemption Gains and losses
- The rule that can eliminate capital gains tax on the sale of a taxpayer's principal residence for the years it qualified as such.
- Proceeds of disposition Gains and losses
- The amount received or receivable for property on a disposition, expressed in Canadian dollars before subtracting ACB and disposition expenses.
Why it matters
Missing the ACB increase can cause the same economic amount to be reflected in taxable income when distributed and again as part of a larger gain on sale.
Why it matters
This exemption applies to real estate, not securities — it is outside myCostBase's scope, which tracks ACB for taxable-account investments only.
Why it matters
Proceeds are one of the three core inputs—along with ACB and outlays—used to calculate a capital gain or loss.
R
- Realized gain or loss Gains and losses
- A gain or loss produced by a disposition, calculated from the actual proceeds, the ACB assigned to the property disposed of, and related outlays.
- Registered account ACB and accounts
- A plan registered under Canadian tax law, such as an RRSP, TFSA, FHSA, or RESP. Trades inside the plan are generally excluded from the investor's taxable ACB pool.
- RESP (Registered Education Savings Plan) ACB and accounts
- A registered plan designed to save for a child's post-secondary education. Contributions are not tax-deductible, but investment income grows tax-free and withdrawals for education are taxed in the student's hands.
- Return of capital (ROC) Transactions and adjustments
- A distribution characterized as returning part of an investor's capital rather than paying current taxable income. It generally reduces ACB, subject to the amount and instructions reported by the fund.
- RRSP (Registered Retirement Savings Plan) ACB and accounts
- A registered retirement plan that allows Canadian taxpayers to save for retirement with tax-deductible contributions. Investment income grows tax-free until withdrawal.
- Reinvested capital gain distribution Transactions and adjustments
- A distribution from a fund that consists of capital gains allocated to you, reinvested in additional units, and fully taxable in the year it is paid.
Why it matters
Realized results feed the tax-year reporting workflow; a change in market value alone generally does not.
Why it matters
A registered account is outside ordinary capital-gains reporting, but an acquisition there can still be relevant when reviewing a loss in an affiliated taxable account.
Why it matters
An RESP is a registered account, so dispositions inside the plan are not subject to capital-gains tax. RESP holdings are outside the taxable ACB pool tracked by myCostBase.
Why it matters
A lower ACB increases a later capital gain or reduces a later capital loss, so the tax effect is often deferred rather than eliminated.
Why it matters
An RRSP is a registered account, so dispositions inside the plan are not subject to capital-gains tax. RRSP holdings are outside the taxable ACB pool tracked by myCostBase.
Why it matters
A reinvested capital gain increases your ACB by the reinvested amount because you are taxed on the distribution in the year it is paid, not later when you sell.
S
- Schedule 3 Slips and reporting
- The CRA schedule used by individuals to calculate and report capital gains or losses by property category and determine the net amount carried to the income tax return.
- Securities ACB and accounts
- Investable financial instruments such as stocks, exchange-traded funds (ETFs), mutual funds, or options. Securities are held in brokerage accounts and are subject to capital-gains taxation when sold.
- Security ledger ACB and accounts
- A chronological record of acquisitions, dispositions, transfers, distributions, corporate actions, currency conversions, and other events affecting one security.
- Stock split or consolidation Transactions and adjustments
- A corporate action that changes the number of shares held without changing the pool's total ACB. A split lowers ACB per share; a consolidation raises it.
- Superficial loss Gains and losses
- A capital loss that can be denied when the same or identical property is acquired by the taxpayer or an affiliated person during the period beginning 30 days before and ending 30 days after the sale, and the substituted property is still owned 30 days after the sale.
Why it matters
For publicly traded shares and fund units, the reporting calculation requires proceeds, ACB, and outlays—not just a broker's net gain figure.
Why it matters
Accurate ACB tracking applies to all types of securities in taxable accounts — each security type (stocks, ETFs, options) can have different adjustment rules but must be tracked with the same ACB principle.
Why it matters
The ledger connects a final ACB or gain to the dated entries that produced it, making corrections and review possible.
Why it matters
If the unit count changes without a matching per-unit adjustment, every later partial-sale calculation will be wrong.
Why it matters
A denied loss cannot simply be claimed for the sale year and may instead adjust the ACB of substituted property, depending on who acquired it and where it is held.
T
- T3 Box 21 Slips and reporting
- The T3 slip box reporting capital gains allocated by a trust. The amount is reported according to the slip instructions and may be connected with a cash or reinvested fund distribution.
- T3 Box 42 Slips and reporting
- The T3 slip box for an amount resulting in a cost-base adjustment, commonly a distribution or return of capital from a trust. The slip footnotes determine how the adjustment is applied.
- T1135 Slips and reporting
- The Foreign Income Verification Statement required for certain Canadian residents and entities that own specified foreign property with a total cost amount exceeding $100,000 CAD at any time in the year.
- T3 slip Slips and reporting
- A tax slip issued by a trust or ETF with a trust structure, showing income allocations including dividend income, capital gains, and return of capital.
- T5 slip Slips and reporting
- A T5 slip reports investment income such as interest and certain dividends. Trust income and allocations are generally reported separately on a T3 slip.
- T5008 slip Slips and reporting
- A T5008 slip reports applicable securities transactions. Box 20 contains cost or book value and Box 21 contains proceeds of disposition or settlement amount.
- T5008 Box 20 Slips and reporting
- The cost or book value reported by the T5008 preparer. CRA guidance states that this amount may or may not reflect the investor's ACB for calculating a gain or loss.
- T5008 Box 21 Slips and reporting
- The T5008 box reporting proceeds of disposition or the settlement amount for the reportable transaction.
- Tax-loss harvesting Gains and losses
- Intentionally realizing a capital loss so it can be applied against capital gains, while considering whether and how to maintain the desired market exposure.
- Tax owner ACB and accounts
- The individual or legal entity that owns the taxable investments and reports their gains or losses. myCostBase uses the tax owner to define which taxable accounts feed the same ACB calculations.
- Taxable account ACB and accounts
- A non-registered investment account subject to capital gains tax on dispositions. It is the account type for which ACB tracking and capital-gains reporting are required.
- TFSA (Tax-Free Savings Account) ACB and accounts
- A registered account available to Canadian residents age 18 and over that allows tax-free growth and tax-free withdrawals of any contributions and earnings.
- Total ACB ACB and accounts
- The Canadian-dollar adjusted cost assigned to every share or unit currently remaining in an identical-property pool.
Why it matters
When a capital-gain distribution is reinvested, the related ACB increase must also be captured so it is not taxed again through the eventual disposition calculation.
Why it matters
A positive return-of-capital amount generally lowers ACB, which changes the gain or loss calculated when the units are sold.
Why it matters
The test uses cost amount rather than current market value, and a security's trading currency alone does not determine whether it is specified foreign property.
Why it matters
A T3 slip reports capital gains distributions (Box 21) and return of capital (Box 42) separately—each must be adjusted into your ACB differently, not combined as a single number.
Why it matters
A T5 slip reports income that may need to be included on your tax return. Do not treat every slip amount as an ACB adjustment; match each amount to its tax character and supporting issuer information.
Why it matters
CRA says Box 20 may or may not reflect adjusted cost base. Reconcile it to your supporting records and make any adjustments required when determining and reporting the gain or loss.
Why it matters
Cross-brokerage pooling, transfers, ETF adjustments, or incomplete broker records can make reconciliation necessary before filing.
Why it matters
It supplies the proceeds side of the capital-gain calculation, but still needs to be matched to the correct transaction, currency treatment, ACB, and expenses.
Why it matters
The strategy depends on accurate ACB and coordination across affiliated accounts so a repurchase does not turn the intended loss into a superficial loss.
Why it matters
Spouses generally maintain separate ACB pools even though transactions by an affiliated spouse can matter for the superficial-loss rule.
Why it matters
Identical property held across multiple taxable accounts must be pooled into one ACB calculation, even if the accounts are at different brokerages or held by a spouse.
Why it matters
A TFSA is a registered account, so dispositions inside the account are not subject to capital-gains tax and do not affect the taxable ACB pool tracked by myCostBase.
Why it matters
Total ACB is the numerator used to calculate ACB per unit and must stay consistent with the pool's remaining quantity after every event.
U
- Unrealized gain or loss Gains and losses
- The difference between an investment's current value and its current ACB before a disposition has occurred.
Why it matters
It helps an investor assess the possible tax direction of a sale, but it is an estimate rather than a completed Schedule 3 transaction.
V
- V-Day valuation (December 31, 1971) ACB and accounts
- The deemed cost-base rule for capital property owned before 1972, when capital gains first became taxable in Canada. Instead of the original purchase price, ACB is generally based on the property's fair market value on December 31, 1971 ("Valuation Day"), or an elective median rule for publicly traded securities.
Why it matters
Few individual investors still hold securities bought before 1972, but the rule matters for older family holdings and estates — using the original purchase price instead of the V-Day value can materially misstate a gain or loss.
W
- Weighted-average method ACB and accounts
- The mandatory Canadian tax calculation that pools the cost of identical property and divides the total cost by the number of units, updating the per-unit average after every purchase.
Why it matters
CRA requires this method for identical property in taxable accounts — FIFO, LIFO, and specific-lot identification are not permitted. It is the foundation of accurate ACB tracking.