How CRA averages cost
Shares of the same class of a company, and units of the same mutual fund trust, are identical properties. Their adjusted cost base is an average: total cost, including commissions and other buying expenses, divided by the number held. It is worked out again at each purchase. A sale takes shares out at that average and leaves the per-share figure unchanged.
This is Example 1 from CRA's capital gains guide, T4037. The CRA's example button loads it. The guide gives years only, and does not give a sale price for its 2008 sale, so the dates and the C$5,000 proceeds in the loaded rows are ours.
| Transaction | Cost | Shares | ACB per share |
|---|---|---|---|
| 2001 purchase at $15 | $1,500 | 100 | $15.00 |
| 2006 purchase at $20 | + $3,000 | + 150 | $18.00 |
| 2008 sale of 200 at the $18 average | − $3,600 | − 200 | $18.00 |
| 2025 purchase at $21 | + $7,350 | + 350 | $20.63 |
The capital gain or loss on a sale is the proceeds, less the ACB of the shares sold, less the costs of selling.
Foreign currency
Each part of a sale in foreign currency converts at its own date. CRA's guide has the proceeds convert at the rate when sold, the ACB at the rate when acquired and the selling costs at the rate when they were incurred. So a US stock can show a gain in Canadian dollars even when its US-dollar price did not move.
CRA says to use the Bank of Canada rate for the day of the transaction in general, and lists conditions under which it accepts other published rates. The Bank publishes no rate on weekends and holidays. For those dates this calculator uses the latest earlier rate and says so under the row, and you can type a different one. Look up any date with the Bank of Canada rate lookup.
Reinvested distributions and T3 box 42
- Reinvested, new units. A DRIP or reinvested distribution that adds units is a purchase at that price, so both cost and units go up.
- Reinvested, no new units. Some funds reinvest a distribution and consolidate the units straight after, so the count stays the same while the cost goes up.
- Return of capital. This lowers the ACB. For a mutual fund trust, the amount is in box 42 of the T3 slip: a positive amount comes off the ACB and a negative amount adds to it. Enter a negative box 42 amount as Reinvested, no new units.
When return of capital takes ACB below zero
If the ACB of trust units goes below zero during the year, CRA treats the negative amount as a capital gain in that year, and the ACB becomes zero. The calculator shows that as a deemed gain.
Splits and consolidations
A split changes the share count and leaves total cost alone, so the per-share figure moves. Enter the new shares for each old share: 2 for a 2-for-1 split, 0.1 for a 1-for-10 consolidation.
Superficial losses
CRA's guide describes a superficial loss as a loss on a sale where the same or identical property is bought in the period from 30 calendar days before the sale to 30 calendar days after it, and is still owned 30 days after the sale. Purchases by an affiliated person, such as a spouse, count too. The loss cannot be deducted, and the person who bought the property can usually add it to that property's ACB.
This calculator flags sales that meet those conditions on the rows entered. It does not change any figure, and it cannot see other accounts or other people. See the superficial loss explainer.
What this calculator does not do
- It calculates no tax. Gains and losses are shown before the inclusion rate.
- It does not read broker statements or slips. Book values on statements can differ from ACB, especially after transfers or late return-of-capital figures.
- It does not cover mergers, spin-offs, short sales, options, or shares that the guide excludes from averaging, such as certain employee option shares.
- It has no Bank of Canada rates before 2017-01-03 for automatic fill. Type earlier rates, or enter the cost in CAD. The Bank keeps older noon and closing rates on its site.
- Holdings in an RRSP or a TFSA have no ACB to track for this purpose, so leave them out.
Holding foreign property? The same rows work in the T1135 calculator. Save them as a CSV here and load the file there.