Adjusted Cost Base


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Adjusted Cost Base

In Canadian taxes, a calculation of the cost of an asset that includes expenditures indirectly related to the purchase price of the asset. For example, the adjusted cost base may include improvements made to real estate or commissions paid for a security. It is important to note that these expenses may be required expenses (one must pay commissions to brokers if one wishes to trade on the stock market), but they are not included in the purchase price, per se. The ACB may also include dividends that are reinvested. In Canada, one is liable for capital gains taxes on an asset sold for a price greater than the adjusted cost base.
References in periodicals archive ?
The reinvested capital gains distributions will increase the unitholder's adjusted cost base for the respective ETF.
Following those consultations, the draft form was revised to eliminate some unnecessary and extremely burdensome computations, including a requirement to report the Adjusted Cost Base (ACB) of the investment in a foreign affiliate or controlled foreign affiliate.
The draft form and reporting requirements require Canadian taxpayers to determine the adjusted cost base (ACB) of shares of every reportable foreign affiliate.
Canadian unitholders are required to reduce the adjusted cost base ("ACB") of their units by an amount equal to the tax-deferred portion of the distributions.
The adjusted cost base of the shares that will be distributed will be $0.
In effect, a rollover could be established for reinvested proceeds, with the adjusted cost base of the original investment carried over to the new investment.
Unitholders are also reminded that this same amount should be added to the adjusted cost base of their holdings of the Fund.
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