The Tracking the Adjusted Cost Base form is a multiple copy form designed to allow you to track the adjusted cost base of the various assets held that belong to the categories found in the Asset category drop-down list, and obtain the average ACB at the time of a total or partial disposition of these assets. Please note that a copy of the form must be created for each asset held.
In order for the ACB tracking to be performed correctly, the transactions must be in chronological order. A diagnostic has been integrated into the program to prompt the preparer to click the Sort button, if applicable, to order the transactions chronologically and obtain the correct ACB.
- Asset categories available for tracking the adjusted cost base
- Qualified small business corporation shares
- Qualified farm property and qualified fishing property (shares)
- Qualified farm property and qualified fishing property (other properties)
- Publicly traded shares, mutual fund unit, deferral of eligible small business corporation shares, and other shares
- Real estate, depreciable property, and other properties
- Bonds, debentures, promissory notes, and other similar properties
- Personal-use property
- Listed personal property (LPP)
- Types of transactions processed
When the share held is part of the category “Qualified small business corporation shares,” “Qualified farm property and qualified fishing property (shares)” or “Publicly traded shares, mutual fund unit, deferral of eligible small business corporation shares, and other shares” the types of transactions that are processed by Taxprep are the following:
- Purchase: When the preparer selects the Purchase transaction type, he or she must enter the number of shares acquired, the acquisition cost and, if applicable, an adjustment amount (+/-). Once this information is entered, Taxprep calculates the total number of shares held, the total cost of shares held and the average ACB per share. All the other data entered will not be taken into account in the calculations.Amounts from a Dividend Reinvestment Plan (DRIP) should be considered a purchase.
- Disposal: When the preparer selects the Disposal transaction type, he or she must enter the number of shares disposed of and the proceeds of disposition. Once this data is entered, Taxprep calculates the ACB of the shares disposed of, the total number of shares held, the total cost of shares held, the average ACB per share and, if applicable, the proceeds of disposition in Canadian dollars. All the other data entered will not be taken into account in the calculations.
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Distribution: When the preparer selects the Distribution transaction type, he or she must enter the number of shares acquired and, if applicable, an adjustment amount (+/-). Once this data is entered, Taxprep calculates the total number of shares held, the total cost of shares held, and the average ACB per share. All the other data entered will not be taken into account in the calculations.
- Split: When the preparer selects the Split transaction type, he or she must enter the total number of shares held and, if applicable, an adjustment amount (+/-). Once this data is entered, Taxprep calculates the total number of shares held, the total cost of shares held, and the average ACB per share. All the other data entered will not be taken into account in the calculations.
- Capital gain: When the preparer selects the Capital gain transaction type, he or she must enter the number of shares acquired and, if applicable, an adjustment amount (+/-). Once this data is entered, Taxprep calculates the total number of shares held, the total cost of shares held, and the average ACB per share. All the other data entered will not be taken into account in the calculations.
- Superficial loss: When the preparer selects the Superficial loss transaction type, he or she must enter an adjustment amount (+/-). Once this amount is entered, Taxprep calculates the total cost of shares held and the average ACB per share. All other data entered will not be taken into account in the calculations.
- Reverse stock split: When the preparer selects the Reverse stock split transaction type, he or she must enter the total number of shares held and, if applicable, an adjustment amount (+/-). Once this data is entered, Taxprep calculates the total number of shares held, the total cost of shares held, and the average ACB per share. All the other data entered will not be taken into account in the calculations.
- Return of capital: When the preparer selects the Return of capital transaction type, he or she must enter the amount of global return on capital in the Adjustment (+/-) column. Once this information is entered, Taxprep calculates the total number of shares held, the total cost of shares held, and the average ACB per share. All data entered in the other columns will not be taken into account in the calculations.If the amount entered in the Adjustment (+/-) column is positive, it will increase the ACB, while if it is negative, it will reduce the ACB. You can also transfer the amount from box 42 of the T3 slip, Statement of Trust Income (Jump Code: T3) to the ACB form of the appropriate asset. The choice of the destination copy is made using a drop-down menu listing all copies to which a transfer can be done (i.e. the copies of the other types of assets are not listed). When the return of capital amount is transferred from the T3 slip to the ACB form, the transaction date will default to December 31 of the current year. You may need to adjust this date, for example, if the asset was disposed of prior to the end of the year.
- Other: It might happen that the transaction type does not correspond to any of the choices offered. In this situation, the preparer can choose the Other transaction type. The line will then become an input line and the preparer will have to enter the total number of shares held and the total cost of shares held. Once this information is entered, Taxprep calculates the average ACB per share. All data entered in the other columns will not be taken into account in the calculations.
When the share held is part of the “Bonds, debentures, promissory notes, and other similar properties” category, the transaction types processed by Taxprep are the following:
- Purchase: When the preparer selects the Purchase transaction type, he or she must enter the number acquired, the face value, the acquisition cost per unit and, if applicable, an adjustment amount (+/-). Once this information is entered, Taxprep calculates the total face value of property held, the total acquisition cost of property held and the average ACB for every $100. All data entered in the other columns will not be taken into account in the calculations.
- Disposal: When the preparer selects the Disposal transaction type, he or she must enter the number disposed of, the total face value of property disposed of and the proceeds of disposition. Once this information is entered, Taxprep calculates the ACB disposed of, the face value per unit of property held, the total acquisition cost of property held and the average ACB for every $100 and the proceeds of disposition in Canadian dollars. All data entered in the other columns will not be taken into account in the calculations.
- Superficial loss: When the preparer selects the Superficial loss transaction type, he or she must enter an adjustment amount (+/-). Once this amount is entered, Taxprep calculates the total acquisition cost of property held and the average ACB for every $100. All other data entered in the other columns will not be taken into account in the calculations.
- Other: It might happen that the transaction type does not correspond to any of the choices offered. In this situation, the preparer can choose the Other transaction type. The line will become an input line and the preparer will have to enter the total face value of property held and the total acquisition cost of property held. Once this information is entered, Taxprep calculates the average ACB for every $100. All data entered in the other columns will not be taken into account in the calculations.
When the asset held is part of the category “Qualified farm property and qualified fishing property (other properties),” “Real estate, depreciable property, and other properties,” “Personal-use property” or “Listed personal property (LPP),” the preparer must enter the acquisition cost and, if applicable, the adjustments. Once this information is entered, Taxprep calculates the adjusted cost base of the asset.
Creating the asset in the spousal return
When the taxpayer and the spouse’s returns are coupled, assets held may be created in the spousal return. To do so, the preparer must select the box Create this asset in the spousal return for each asset to be created in the spousal return. Data relating to the selected assets will then be completely copied in the spouse’s Tracking the Adjusted Cost Base form.
Transfer to Schedule 3 when there is a total or partial asset disposition
When there is a disposition in the current year, you may automatically transfer the information from Form ACB, Tracking the Adjusted Cost Base to Schedule 3, Summary of Dispositions – Capital Gains (or Losses) (Jump Code: A3), in the section that corresponds to the category of asset disposed of.
In order for Taxprep to transfer data, the box When there is a current year disposition, transfer data to Schedule 3 must be selected.
Transfer from Schedule 3 into Form ACB when there is a superficial loss
When, in Schedule 3, a loss is identified as a superficial loss and information on the disposition originates from Form ACB, the ACB adjustment is automatically made in Form ACB for the affected property. The adjustment appears in the Adjustment (+/-) column of this form and corresponds to the loss that would have been calculated. This information transfer is done for the following asset categories:
- Qualified small business corporation shares
- Qualified farm property and qualified fishing property (shares)
- Publicly traded shares, mutual fund units, deferral of eligible small business corporation shares, and other shares
- Bonds, debentures, promissory notes, and other similar properties
Translation into Canadian dollars
In order for Taxprep to translate the data, enter a foreign currency. The program automatically displays the foreign currency associated with the country where the property is located. If the displayed foreign currency is not the desired currency, you can select another one.
When, for a particular transaction, the check box Calculate the exchange rate of the foreign currency in the Exchange rate column is selected, the average exchange rate for the month during which the transaction took place automatically displays in the Exchange rate column.
The available foreign currencies are those listed in the “History of monthly and annual averages” section of Form Rates and Countries, Foreign Exchange Rates Worksheet. When the monthly average exchange rate is not available, Taxprep displays “1.000000.”
For the asset category Publicly traded shares, mutual funds units, deferral of eligible small business corporation shares, and other shares, the translation to Canadian applies to the following types of transactions:
- Purchase
- Disposition
- Distribution
- Split
- Capital gain
- Superficial loss
- Reverse stock split
- Return of capital
For the asset category Bonds, debentures, promissory notes, and other similar properties the translation to Canadian applies to the following types of transactions:
- Purchase
- Disposition
- Superficial loss
Transfer from the ACB form into the T1135 form
A transfer of data from the ACB form into the T1135 form can be made when property held entered in the ACB form is specified foreign property that is part of the following classes:
- Publicly traded shares, mutual funds units, deferral of eligible small business corporation shares, and other shares
- Bonds, debentures, promissory notes, and other similar properties
- Real estate, depreciable property, and other properties
Note that no data is transferred if Part A, “Simplified reporting method,” has been completed in Form T1135.
In order for Taxprep to transfer the data, answer the question If this is a specified property, select the section of the Form T1135 into which this property should be transferred.
Based on the section of Form T1135 selected for the transfer, the data transferred to Form T1135 is the description, country code, maximum funds held during the year/maximum cost amount during the year/ and funds held at year end/cost amount at year end.
If the property is part of the Real estate, depreciable property, and other properties class in the ACB form and the box It consists of depreciable property is selected, only the description and the country code are transferred to Form T1135.
If the data relating to the property is also transferred to Schedule 3, Taxprep transfers the income (loss)/gain (loss) on disposition, as applicable.
For more information, consult the Help for Form T1135.
Rolling data forward
When the selected asset category is “Qualified small business corporation shares,” “Qualified farm property and qualified fishing property (shares)” or “Publicly traded shares, mutual fund unit, deferral of eligible small business corporation shares, and other shares,” all data entered in the Tracking the Adjusted Cost Base form will be rolled forward from year to year, EXCEPT if the total number of shares held becomes nil, in which case the table for the asset concerned will no longer be rolled forward.
When the selected asset category is “Bonds, debentures, promissory notes, and other similar properties,” all data entered in the Tracking the Adjusted Cost Base form will be rolled forward from year to year, EXCEPT if the total principal of property held becomes nil, in which case the table for the asset concerned will no longer be rolled forward.
When the selected asset category is “Qualified farm property and qualified fishing property (other properties),” “Real estate, depreciable property, and other properties,” “Personal-use property” or “Listed personal property (LPP),” all data entered in the Tracking the Adjusted Cost Base form will be rolled forward from year to year, EXCEPT if a disposition date in entered AND the box Discontinue rolling forward when there is a disposition is selected, in which case the table for the asset concerned will no longer be rolled forward.