The deemed cost of an asset representing the sum of the amount originally paid plus any additional costs, such as brokerage fees and commissions.
What is Adjusted Cost Base (ACB)?
The adjusted cost base (ACB) is a term used in Canadian tax law to calculate the capital gain or loss on a security (e.g. stock, mutual fund) when it is sold. It represents the total cost of an investment, including purchase price and any additional costs incurred, adjusted for certain events such as stock splits or return of capital distributions.
The ACB is used to determine the taxable capital gain or loss on the sale of an investment. The capital gain is calculated by subtracting the ACB from the sale price, and the capital loss is calculated by subtracting the sale price from the ACB.
In general, the ACB should be kept track of for each security held in a portfolio, as it can have a significant impact on the amount of tax owed on the sale of the security.
