There are basically two aspects:
1) You need to report and pay tax on all income earned in taxable accounts, including dividends, interest and capital gains. This is not too hard because you will get either a T3 or T5 depending on the type of investment. This is plug and play... just take the info from the tax slips and copy it into your tax return. CRA even offers a service called Auto-fill, that fills such data directly into a tax program.
2) ACB as you mentioned. If you hold ETFs, ACB can be a little more complicated because ETFs may issue Return of Capital that must be subtracted from your ACB, and Reinvested Capital Gains Distributions that should be added to your ACB. Any time you buy you need to add to your ACB and any time you sell you need to subtract from your ACB so you can properly report capital gains or losses.
This CRA document explains ACB tracking. It focuses on mutual funds but is applicable to other types of investments.
Tax Treatment of Mutual Funds for Individuals
This document explains in depth how to track ACB including RoC and Reinvested Distributions
As Easy as ACB – Understanding and tracking your adjusted cost base with ETFs
This website is a good online tool for tracking Cost Base
Adjusted Cost Base.ca The Free and Easy Way to Calculate ACB and Track Capital Gains
Most brokers are good at tracking ACB these days, but if you hold a security at more than one broker you need to track it yourself, and if you transfer in-kind between brokers the proper cost base may not be tracked by the new broker.
1) You need to report and pay tax on all income earned in taxable accounts, including dividends, interest and capital gains. This is not too hard because you will get either a T3 or T5 depending on the type of investment. This is plug and play... just take the info from the tax slips and copy it into your tax return. CRA even offers a service called Auto-fill, that fills such data directly into a tax program.
2) ACB as you mentioned. If you hold ETFs, ACB can be a little more complicated because ETFs may issue Return of Capital that must be subtracted from your ACB, and Reinvested Capital Gains Distributions that should be added to your ACB. Any time you buy you need to add to your ACB and any time you sell you need to subtract from your ACB so you can properly report capital gains or losses.
This CRA document explains ACB tracking. It focuses on mutual funds but is applicable to other types of investments.
Tax Treatment of Mutual Funds for Individuals
This document explains in depth how to track ACB including RoC and Reinvested Distributions
As Easy as ACB – Understanding and tracking your adjusted cost base with ETFs
This website is a good online tool for tracking Cost Base
Adjusted Cost Base.ca The Free and Easy Way to Calculate ACB and Track Capital Gains
Most brokers are good at tracking ACB these days, but if you hold a security at more than one broker you need to track it yourself, and if you transfer in-kind between brokers the proper cost base may not be tracked by the new broker.
I solemnly swear, to never assume I have an inkling at which direction the market will head, and to never make any investments based on a timing strategy.
