Adjusted cost base
Adjusted cost base is used in the Canadian tax system to refer to the cost of an investment adjusted for several tax-related items including acquisition costs. It is used in the calculation of capital gains or losses.
Calculation
For Stocks, Mutual Funds and Bonds
Total ACB:ACB can also be presented as ACB per unit:
Note: Additional contributions includes any reinvested distributions.
An increase in the ACB will reduce the amount of capital gains realized at time of disposition. Mutual fund front end or deferred sales charges are treated like purchase and sale commissions for tax purposes.
For Selling Property
Capital improvements made to a property are added to the ACB of that property. Capital improvements generally extend the life of a property and specifically exclude routine repairs and maintenance.Acquisition costs such as legal fees, land transfer tax, land surveys and property inspections increase the ACB of a property. Interest paid on debt used to acquire vacant land is added to the ACB of the land.