How the Adjusted Cost Basis works

Canada's approach to calculating crypto capital gains is different from most countries. The CRA uses the Adjusted Cost Basis (ACB) method, and if you're not applying it correctly, your tax calculations are wrong.

What ACB means

With ACB, every time you buy more of a cryptocurrency, the average cost per unit is recalculated across your entire holding. When you sell, you compare the proceeds to this average cost, not the cost of the specific units you bought.

The ACB formula

The formula is straightforward:

New ACB per unit = (Previous total cost + New purchase cost) / Total units held

You apply this every time you make a new purchase of the same asset. The ACB per unit changes with each buy, and your capital gain or loss on any sale is always calculated against that running average.

A simple example

Here's how ACB works across three trades on Bitcoin:

1st January: Buy 2 BTC at $1,000 each Total cost: $2,000. ACB per unit: $1,000. You now hold 2 BTC.

3rd January: Buy 2 more BTC at $3,000 each New total cost: $2,000 + $6,000 = $8,000. Total units: 4 BTC. ACB per unit recalculates to $8,000 / 4 = $2,000.

6th February: Sell 1 BTC at $5,000 Proceeds: $5,000. ACB of the unit sold: $2,000. Capital gain: $3,000. Under Canada's 50% inclusion rate, $1,500 is added to your taxable income for the year.

Notice that the gain is calculated against the $2,000 average, not the $1,000 you originally paid for your first batch. That's the core mechanic of ACB.

ACB is tracked per cryptocurrency, not per wallet

A common misconception is that ACB is calculated separately for each exchange or wallet. It isn't. Your ACB pool for Bitcoin covers every BTC you hold, across every platform and wallet.

Moving BTC from Coinbase to a hardware wallet is not a taxable event and does not change your ACB. But if your Coinbase export doesn't show the transfer, and you then calculate ACB only from your Binance history, your numbers will be wrong.

This is the most common source of ACB errors for active traders. Your full transaction history, across every platform, has to feed into a single calculation.

How Summ helps

Summ reconciles your full transaction history across all connected exchanges and wallets before calculating ACB, so the numbers reflect what actually happened.

Import your transactions and calculate ACB →