Adjusted Cost Base
The Adjusted Cost Base (ACB) is used in calculating capital gains or losses on the disposition of
trust units held as capital property by a unitholder. The ACB of each trust unit is reduced by the
amount of distributions received as a return of capital to date on that unit. When a Canadian
taxpayer's ACB drops below zero during a taxation year, the negative amount is considered by
CCRA (Revenue Canada ) to be a capital gain. Unitholders re-set their trust unit cost base to zero
by paying capital gains tax on the negative cost base portion.
To calculate your adjusted cost base, use the formula below:
* Post-June 2003 Consolidation