PRWS

[dejeb]

What goes into PRWS 'Adjusted cost base at the time of disposition'? If no fees involved, is the value same as the value of the 'Proceeds of disposition'?

[TurboTaxAniqua]

On the Personal Real Estate and Workplace Securities (PRWS) worksheet or Schedule 3, the Adjusted Cost Base (ACB) represents your total investment in the property, while the Proceeds of Disposition represents the final sale amount.

Here is the precise breakdown of the calculation:

1. Adjusted Cost Base (ACB)

The ACB is not just the purchase price. It is the sum of:

Original Purchase Price: What you originally paid for the asset.

Acquisition Costs: Expenses to buy the asset (e.g., brokerage commissions, legal fees, and land transfer tax).

Capital Improvements: For real estate, this includes permanent additions or upgrades (e.g., building a garage or finishing a basement). Maintenance and repairs do not count.

2. Proceeds of Disposition

This is the selling price (the total amount you received or are "deemed" to have received) before any selling costs are deducted.

3. Is the value the same if there are no fees?

In general, no. Even with no fees, the values will only match if you sell the asset for the exact same price you paid (including initial acquisition costs).

If Proceeds exceed ACB, you have a capital gain.

A capital loss occurs when Proceeds are less than ACB.

Note: Entering the same value for both informs the CRA that the asset's value did not change during your ownership, resulting in a $0 tax impact. This is unusual for real estate or securities.

CRA Reference: CRA: Calculating your capital gain or loss 

Thank you for choosing TurboTax.

[dejeb]

Thanks... that's what I actually initially thought, but using 'disposition' which normally means 'to get rid of' created some confusion and thought one entry was with fees and one entry was without fees... even 'cost' is there which is usually related to purchase, probably ACB at the time of 'acquisition' or 'purchase' would clear the confusion