Tracking the adjusted cost base

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, among other things, 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.

The average ACB is calculated for each type of transaction, based on the transaction date. Depending on the type of transaction, certain fields will contain the “N/A” mention, indicating that they are not required when calculating the average ACB.

If one of the fields with the “N/A” mention is overridden, the value entered in the field will not be retained and the “N/A” mention will be re-entered automatically.

You can click the Sort button to order the transactions chronologically according to the date they were made. When transactions took place on the same date, the program considers that the input order is the chronological order for those transactions. After having selected the sort function, if the result obtained does not correspond to the actual chronological order, modify the lines concerned to ensure the sort displayed is the actual chronological order for the transactions.

Asset categories available for tracking the adjusted cost base

• Shares
• Real estate
• Bonds
• Other properties
• Personal-use property
• Listed personal property

Types of transactions processed

When the share held is part of the “Shares” category, the types of transactions processed by the program are the following:

• Purchase 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 (+/-) as well as an exchange rate (the default exchange rate is 1,00). Once this information is entered, the program calculates the total face value of property held, the total acquisition cost of property held and the average ACB for every $100.
• Disposal Disposal When the preparer selects the “Disposal” transaction type, he or she must enter the number disposed of and the face value per unit of property disposed of. Once this information is entered, the program calculates the ACB disposed of, the total face value of property held, the total acquisition cost of property held and the average ACB for every $100.
• Split 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, the program calculates the total number of shares held, the total cost of shares held and the average ACB per share.
• Reverse stock split 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, the program calculates the total number of shares held, the total cost of shares held and the average ACB per share.
• Return of capital Return of capital When the preparer selects the “Return of capital” transaction type, he or she must enter the amount of global return of capital in the Adjustment (+/-) column and, if applicable, a rate in the Exchange rate column. Once this information is entered, the program 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.
• Amalgamation/Dissolution Amalgamation/Dissolution When the preparer selects the “Amalgamation/Dissolution” transaction type, he or she must enter the total number of shares acquired, the acquisition cost and, if applicable, an adjustment amount (+/-) and an exchange rate (the default exchange rate is 1,00). Once this data is entered, the program calculates the total number of shares held, the total cost of shares held and the average ACB per share.
• Acquisition of control Acquisition of control When the preparer selects the “Acquisition of control” transaction type, he or she must enter the total number of shares disposed of. Once this data is entered, the program calculates the total number of shares disposed of, the total cost of shares held and the average ACB per share.
• Other 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, the program calculates the average ACB per share.

When the share held is part of the “Bonds” category, the types of transactions processed by Taxprep are the following:

• Purchase Purchase When the preparer selects the “Purchase” transaction type, he or she must enter the number of shares acquired, the face value, the acquisition cost per unit and, if applicable, an adjustment amount (+/-) as well as an exchange rate (the default exchange rate is 1,00). Once this information is entered, the program calculates the total face value of property held, the total acquisition cost of property held and the average ACB for every $100.
• Disposal Disposal When the preparer selects the “Disposal” transaction type, he or she must enter the number of shares disposed of and the face value per unit of property disposed of. Once this information is entered, the program calculates the ACB of shares disposed of, the total face value of property held, the total acquisition cost of property held and the average ACB for every $100.
• Other 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, the program calculates the average ACB for every $100.

When the asset held is part of the category “Real estate,” “Other properties,” “Personal-use property” or “Listed personal property,” the preparer must enter the acquisition cost and, if applicable, the adjustments. Once this information is entered, the program calculates the asset’s adjusted cost base.

Transfer to Schedule 6 when there is a total or partial asset disposition

When there is a disposition in the current taxation year, you may automatically transfer the information from Form ACB, Tracking the Adjusted Cost Base, to Schedule 6, Summary of Dispositions of Capital Property (Jump Code: 6), in the section that corresponds to the class of asset disposed of.

For the program to transfer data, the check box When there is a current year disposition, transfer data to Schedule 6 must be selected. You can apply this option to all client files by selecting the check box of the same name in the preparer profile you are using.

In addition, when a country code is entered in the box If this is a specified foreign property, please indicate the related country code, the check box in column FS (for foreign source) of the line created in Schedule 6 is automatically selected.

Moreover, when the answer to the question Is this property other than an active asset, as defined in subsection 125(7) ITA?, is “Yes,” the check box in column PA (for passive asset) of the line created in Schedule 6 is automatically selected.

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:

• Shares
• Real estate
• Bonds
• Other properties

In order for the program to transfer the data, answer the question Do you want to transfer data to Form T1135? If applicable, 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 This is a 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 6, the program transfers the income (loss)/gain (loss) on disposition, as applicable.

* Note that no data is transferred if Part A, “Simplified reporting method,” has been completed in Form T1135.

For more information, consult the Help for Form T1135.

Rolling data forward

When the selected asset category is “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,” all data entered in the Tracking the Adjusted Cost Base form will be rolled forward from year to year, EXCEPT if the total face value 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 “Real estate,” “Other properties,” “Personal-use property” or “Listed personal property,” 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.