Cost basis of security when I have a choice of purchase price / date
I remember hearing talk about a new tax rule being considered whereby if you sold a security (stock, mutual fund or ETF I guess) then the cost basis would have to be from the earliest purchase (or highest purchase price?) of that security. So if I bought 100 shares of a specific index fund in 2010 at $50 per share and then purchased another block of 100 shares in 2015 at $75 per share, then sold 100 shares in 2019 at $100 per share, I would be required to make $50 be the cost basis.
Cost basis of security when I have a choice of purchase price / date
Hello,
In order to calculate your capital gain for tax purposes you would use the Adjusted Cost Base ("ACB"). The Adjusted Cost Base is the sum of the cost of the asset including the expenses incurred to acquire the asset. The Adjusted Cost Base in your example would be $12,500 for the 200 shares. The Capital Gain would be the proceeds from the sale less the ACB of those number of shares and any expenses incurred to sell those shares, ($10,000 - $6,250 = $3,750). Capital Gains and Losses are reported on Schedule 3 of the Federal Income Tax Return.
For Reference please review these Canada Revenue Resources:
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