Capital Gains and Adjusted Cost Base

Doug Dubowski

When I run a Capital Gains report in Quicken, for each sell transaction, Quicken identifies the "Cost Basis" for the sold shares. Is this the same as the "Adjusted Cost Base"? The associated T5008 slip issued by the financial advisor uses the term "Cost or Book Value" for the same transaction, but the values in Quicken are slightly different than the values in the T5008 (less than $1 difference). I am hoping all three terms "Cost Basis", "Cost or Book Value" and "Adjusted Cost Base" mean the same thing.

Frankx

Hi @Doug Dubowski

So first a disclaimer - I am not all that familiar with current Canadian tax requirements (it has been a long time since I've reviewed, or been involved with, Canadian tax laws and regs.).

That being said, the general concepts of capital gain calculations are similar to those in the US.  Canada tax law and regs. use the term "Adjusted Cost Basis" and it is very similar to US requirements.  Here's a link to the definition from the "Government of Canada's" tax website LINK.

The bottom line is that all three terms mean basically the same thing, but  I suggest that you use the amount from the form T5008, since that is the amount that the broker/financial advisor has reported to the Canada Tax authorities as part of their reporting requirements, and unless there are other factors - or if you believe that number to be incorrect in a material amount - it is best to use that number.

Let me know if you have any followups.

[N.B. - I am not providing any tax advice or providing any tax services in this post - you should contact your tax advisor about tax matters for which you need assistance]

Frankx

Hi @Doug Dubowski

So first a disclaimer - I am not all that familiar with current Canadian tax requirements (it has been a long time since I've reviewed, or been involved with, Canadian tax laws and regs.).

That being said, the general concepts of capital gain calculations are similar to those in the US.  Canada tax law and regs. use the term "Adjusted Cost Basis" and it is very similar to US requirements.  Here's a link to the definition from the "Government of Canada's" tax website LINK.

The bottom line is that all three terms mean basically the same thing, but  I suggest that you use the amount from the form T5008, since that is the amount that the broker/financial advisor has reported to the Canada Tax authorities as part of their reporting requirements, and unless there are other factors - or if you believe that number to be incorrect in a material amount - it is best to use that number.

Let me know if you have any followups.

[N.B. - I am not providing any tax advice or providing any tax services in this post - you should contact your tax advisor about tax matters for which you need assistance]