Tracking Adjusted Cost Base with Multiple Brokerage Accounts

When an individual owns the same security in multiple trading/brokerage accounts, adjusted cost base should not be calculated separately for each account.  It may seem as though you should calculate adjusted cost base separately for each account, but the Canada Revenue Agency (CRA) requires that it be calculated jointly, as if all brokerage accounts were merged together.

If you own the same security in both a taxable account and registered accounts (RRSP or TFSA), any transactions within the registered accounts are non-taxable and thus ACB does not need to be calculated for the registered account.  The transactions within the registered accounts can be ignored when calculating ACB for the taxable account (with the exception that a transaction in a registered account can trigger the superficial loss rule for a transaction in a non-registered account).

AdjustedCostBase.ca provides a feature that allows users to have multiple portfolios.  However, separate portfolios should not be used for the case where you have multiple personal non-registered accounts.  It should only be used in other circumstances, such as for tracking ACB in a corporate account, or when using the tool for family members or clients.

This may be part of the reason why brokerages are not held responsible for reported ACB to their clients.  Since the brokerage is unaware about the client’s other accounts, it would be impossible for the brokerage to provide information on adjusted cost base to the client that’s guaranteed to be accurate.

24 thoughts on “Tracking Adjusted Cost Base with Multiple Brokerage Accounts

  1. neilsherri

    What about a mutual fund that you purchased at one institution that used the regular fee version and another institution that used the low fee version of the same fund?

  2. AdjustedCostBase.ca

    Different versions of a mutual fund should probably be tracked separately since they are different classes and usually have different NAVs per share. However, a sale of one and purchase of the other within 30 days could trigger the superficial loss rule.

  3. neilsherri

    Appreciate the initial answer… I did some checking with the brokerage and they said they used a different “class” fund that has different NAV numbers. So on any given day one fund might be $31.20 and the other might be $32.50

    How can an accurate ACB be calculated if the two classes of funds have different NAVs on a given day?

  4. Nadeem

    What will be the ACB of a stock that is sold short? Will it be negative? Could you please also let me know if your ACB spreadsheet is geared for calculating ACB on short selling. Thanks

  5. Nadeem

    Thanks very much for the clarification. I am bit confused about when do we need to calculate ACB, as I am new in Canada and I actively trade U.S stocks on margin. You stated that ACB and Capital gains are not calculated on Short selling as it is considered to be on “Income A/c”. Assuming that all my other U.S stock long trades qualify only as “trading income” due to high frequency and so on. Do I still have to calculate ACB (and Capital gains on the basis of ACB) for tax purposes?

  6. Nadeem

    Thanks for such an important clarification for all those individuals who may not qualify for Capital A/c and still undertake this painful exercise with hundreds of trades!

    Since ACB is the basis of Gain/Loss calculation on Capital A/c, could you please clarify what will be the basis of G/L calculation on Income A/c assuming the same stock transactions data.

    Many thanks

  7. Ignac Vucko

    I have read that the superficial loss rule will apply if you sell a security in non-registered account but buy it from a registered account within the 61 day window. As such, while ACB for registered accounts don’t strictly need to be calculated, trade dates for securities that are in common between non-registered and registered accounts must be tracked.

    If this is correct, I think this FAQ answer should be modified to specifically mention this.

    Thanks

  8. Matt

    What happens if you have a non-registered account in your name and a non-registered account that is a joint account? Do you combine the ACB or do you calculate them separately?

    Thanks!

  9. Richard

    Hi. The article mentions combining ACB for identical securities held in multiple non-registered trading accounts.

    Does holding a security in bold CDN and USD also apply? The security in CDN for examples has a different ticker .tsx whereas the USD held version is on the NYSE.

    Must these also be combined?

    Thanks

  10. ed wainwright

    my mothers original broker merged or was taken over several times then the account was moved to a discount broker the shares that came over are shown as book value unavailable. I have been unsuccessful trying to track the original cost of these shares. as I will one day be the executor of her estate how can I determine a cost base for cra reporting

  11. Pete

    Is interest paid in a margin account eligible to be added to the ACB for a stock producing capital gains only?

    The stock in the margin account in question does not produce income, so I cannot deduct it as an investment expense as I am only producing capital gains. However, I think there should be some mechanism for me to claim that expense (interest) on the money I earn when I sell the stock.

  12. Norm

    What happens if you have a total of three non-registered accounts. One joint and as well each spouse has one. Do you combine the ACB for holdings in multiple accounts or do you calculate them separately?

  13. AdjustedCostBase.ca

    Norm,

    According to IT-511R:

    “Pursuant to paragraphs 74.2(1)(a) and (b), where an individual has transferred or loaned property to the individual’s spouse any taxable capital gains or allowable capital losses arising from the dispositions of the property or property substituted for it (other than listed personal property) are deemed to be taxable capital gains or allowable capital losses of the individual.”

    According to attribution rules for spouses capital gains are allocated based on whom the funds used to purchase the shares originated from. If both you and your spouse funded the purchase, then the gain should be allocated in that same proportion.

    This can become complex and murky when there are many cash transfers into the account and many share purchases.

    I’m not completely clear on how ACB should be calculated when you own identical property both in an individual account and a joint account with your spouse. My guess would be that you would each maintain your own ACB, which is calculated based on your own shares held in your individual account, combined with a portion of shares in the joint account that’s based on how much you’ve contributed to funding the account.

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  15. Corrie

    What to report in Box 20 if one bought and sold same type of shares multiple times in the year? I was told that it should be the ACB right before the sell. But I sold multiple times, so not sure how to report. Kindly clarify this for me, please!

  16. Charmaine

    I was hoping to see the answer to Richard’s question:

    “Hi. The article mentions combining ACB for identical securities held in multiple non-registered trading accounts.

    Does holding a security in bold CDN and USD also apply? The security in CDN for examples has a different ticker .tsx whereas the USD held version is on the NYSE.

    Must these also be combined?”

    I have say BNS.TO and BNS (US) stocks. Do I have to combine them when calculating the ACB (by first converting the US version of the BNS stock)?

    Thanks,

    Charmaine

  17. AdjustedCostBase.ca Post author

    Charmaine,

    It is my understanding that cross-listed stocks that are identical aside from the currency and exchange would be considered identical property, and thus ACB should be calculated jointly.

  18. Nitro

    Folks, I am not an expert on this subject at all. However, I would like to post my comments for feedback/verification. I found it tough to find detailed information on the scenario that Matt & Norm previously mentioned. Please note, I have never consulted an accountant on this, but what I post below sure makes the most sense to me. The example I eventually present is very simple.

    Again, looking to see if my assertions below are correct.

    To quote Matt:

    “What happens if you have a non-registered account in your name and a non-registered account that is a joint account? Do you combine the ACB or do you calculate them separately?”

    BACKGROUND
    I am rather surprised that the answer is not abundant on the Internet. You see many posts about attribution rules and income, but not much about how to allocate costs. Further, I would think these type of scenarios are very common. A person starts of single (and has an individual account) and then at some points gets married. As such, I am sure many then start an additional joint account to “save together”.

    ANSWERS
    I found two or three. One here on this site and one on Canadian Money Forum. I like the one I found here the best. To quote a couple:

    Here: “I’m not completely clear on how ACB should be calculated when you own identical property both in an individual account and a joint account with your spouse. My guess would be that you would each maintain your own ACB, which is calculated based on your own shares held in your individual account, combined with a portion of shares in the joint account that’s based on how much you’ve contributed to funding the account.”

    CMF: “Your ACB is the weighted average of shares in your personal account and your share of shares in the joint account. Your spouse’s ACB is based solely on their 50% portion of the shares in the joint account. It is not the accounts that matter, it is the ownership of the number of shares that count.”

    Okay so what does that mean exactly.

    THE WRONG WAY
    When I started recording this, I recorded based on the account. In other words I tracked the ACB separately for each account. On the surface it made sense for two reasons. First, separating things by account just seemed logical. Second, the brokerage reports information this way and thus implies correctness. As such, it also gives you a quick way to compare your ACB calculations to theirs.
    – all wrong as I now understand it —

    EXAMPLE 1 (50/50)– THE RIGHT WAY?
    Okay super simple scenario. Obviously, all fictitious dates and numbers but you get the idea.

    Sept 1, 2016 – John Doe has an individual account and buys 100 shares of BCE for a total of $6144.99 (6135+9.99 commission)
    Dec 2, 2016 – John Doe marries Jane Doe
    Dec 1, 2017 – John and Jane buy 100 shares of BCE for a total of $5009.99 (5000 + 9.99 commission)- funded equally.

    I think the key to all of this is simple. Just track the ACB of a given stock across ALL accounts for a give person and always ask “how much stock did that person really just buy in a given account” (i.e. the proportion).

    As such…

    On Sept 1, 2016
    John buy 100 shares of BCE at an ACB of $61.45 per share(6144.99/100) or $6144.99 as a total cost.

    On Dec 1, 2017
    So what did John buy? He actually bought 50 shares (100/2) for $2505 (5009.99/2) in that joint account.
    His new ACB is for 150 shares (100 + new 50) = 6144.99 + 2505.00 = $8649.99
    His new ACB per share is $8649.99/150 = $57.67

    So what did Jane buy? She bought 50 shares for $2505. She had nothing before.
    Her ACB per share is $2505/50 = $50.10

    Even though they have shares in the join account, they each have a different ACB for those shares when they sell them.

    EXAMPLE 1 (30/70)– THE RIGHT WAY?
    Lets use the exact same example. However, for whatever reason John contributes 30% of the funds to buy the shares in the joint account.

    As such…

    On Sept 1, 2016
    John has 100 shares of BCE at an ACB of $61.45 per share(6144.99/100) or $6144.99 as a total cost.

    On Dec 1, 2017
    So what did John buy? He actually bought 30 shares (100 * 0.3) for $1503 (5009.99 * 0.3).
    His new ACB for 130 shares (100 + new 30) = 6144.99 + 1503.00 = $7647.99
    His new ACB per share is $7647.99/130 = $58.83

    So what did Jane buy? She bough 70 (100 * 0.7) shares for $3506.99 (5009.99 * 0.7). She had nothing before.
    Her ACB per share is $ 3506.99/70 = $50.10

    Comments?

  19. AdjustedCostBase.ca Post author

    Nitro,

    That sounds reasonable to me. To clarify your 50/50 example, I think you intended to say that each spouse contributes 50% of the funds to buy the shares.

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