T5008 Box 20 and Box 21 explained

What the two boxes are

Subtract one from the other and you have something that looks like a capital gain. That is the trap. Neither box is guaranteed to be the number Schedule 3 wants, and CRA says so directly in both cases.

Box 20 is not your ACB, and CRA says so

This is not a subtlety we are inventing. It is printed in CRA's own material. The T5008 guide's note on Box 20 states that the amount "may or may not reflect the investor's ACB," and that the investor "may have to make adjustments to the amount indicated in box 20."

The page CRA writes for individuals is firmer still. It says the amount in Box 20 "may or may not reflect your adjusted cost base," and that "you are required to make the adjustments, as needed, to the amount indicated in box 20, at the time of determining and reporting your gain or loss from the disposition."

Read that again. CRA is telling you the number on the slip may be wrong for tax purposes, and that fixing it is your job rather than your broker's.

The reason is structural. CRA defines book value as the total paid to purchase a security, including transaction charges, adjusted for reinvested distributions, returns of capital and corporate reorganizations. Your broker computes that from what it can see, which is one account. Adjusted cost base under ITA s. 47 is pooled across every non-registered account you hold, at every institution. Those two figures agree only by coincidence.

There are about a dozen distinct ways the two drift apart, from transfers booked at market value to unapplied return of capital to superficial loss add-backs your broker never tracked. We set them out in full, with the direction of the error in each case, in book cost is not your adjusted cost base.

Is a blank Box 20 a problem?

It is common, and it is not by itself a filing defect on the broker's part. CRA does expect effort, stating that the preparer "is expected to take reasonable measures in order to ensure that the amount reported in box 20 is correct," and instructing filers not to enter market value or the sale price in that box. But a slip can arrive with the box empty, particularly where the position was transferred in and the receiving broker never learned the original cost.

A blank Box 20 changes nothing about your obligation. You still have to report an accurate adjusted cost base. If your broker cannot supply one, that work falls to you, and it is exactly the situation where reconstructing the pool from your full transaction history matters.

Box 21, and the gross versus net question

CRA's instruction to filers is unambiguous. Report the total proceeds in Box 21. Do not deduct any expenses from the proceeds, and do not report negative amounts. Where a charge reduces what actually reaches you, CRA's position is that the charge does not reduce the proceeds figure, and that an individual deducts it separately as outlays and expenses on Schedule 3. The guide to proceeds of disposition covers the definition itself and the dispositions that never produce a slip.

The one exception is that Box 21 may be negative, but only where Box 15 carries the type code FUT or OPC.

Something else is deliberately absent from Box 21. Interest accrued on an equity linked note is reported to you on a T5 as investment income, not folded into the proceeds on the T5008 covering the note. If you add it to your Schedule 3 proceeds because it appeared in the same year on the same holding, you have counted it twice, once as investment income and once as a capital gain.

Broker practice is not uniform. Some Canadian brokers report Box 21 gross of commission, as CRA instructs. Others report it net. We are not going to name which is which, because the available evidence for individual brokers is investor reports rather than published broker documentation, and a claim like that should not rest on that footing. What matters is that you cannot assume, and that checking takes two minutes.

The commission double-count

Here is why the gross versus net question deserves your attention rather than being a technicality.

Schedule 3 asks for three separate money figures for each disposition. Proceeds of disposition. Adjusted cost base. Outlays and expenses. Your gain is the first minus the other two.

On a single trade it is trivial. Across a few hundred dispositions it is not, and it runs in the direction CRA reassesses, because it understates the gain.

The reverse error is just as easy. If your broker reports gross, as CRA instructs, and you never claim your commissions as outlays at all, you overpay.

How to check your own slip in two minutes

Take one disposition where you know the commission. Find the same trade on your broker's trade confirmation or in the activity export.

• If Box 21 equals the share count times the execution price, with no deduction, your slip is gross. Claim your commissions as outlays on Schedule 3.
• If Box 21 equals that figure minus the commission, your slip is net. Either gross it back up and claim the commission as an outlay, or leave the proceeds as reported and claim nothing. Do not do both.

Check one slip per broker per year. Practice can change, and a slip that was gross last year is not a guarantee about this year.

Foreign currency

Box 13 carries a three-character ISO currency code, and is left blank for Canadian funds. Filers are instructed to complete slips in Canadian currency using the exchange rate in effect at the time of the transaction, or an average rate covering the transaction period. Amounts remain in a foreign currency only where the proceeds were deposited to a client's foreign-currency account without being converted.

If your slip carries a currency code, the conversion is yours to do and yours to defend. Section 261 is the general anchor for currency conversion, and CRA's guidance points to the Bank of Canada rate for the transaction date, with average or annual rates acceptable in some circumstances. The important part is that each disposition converts at its own date rather than at a single year-end rate.

How ActiveACB handles these two boxes

ActiveACB does not take Box 20 at face value. It rebuilds your adjusted cost base from your actual transaction history, pooling identical property across every account you upload, applying return of capital and reinvested distributions, adjusting for superficial losses and corporate actions, and converting foreign-currency trades at the settlement-date rate. Run your own broker export through the ACB calculator. Your first calculation is free.

It then reports proceeds and outlays separately, in the form Schedule 3 asks for, so the commission is counted exactly once. Where your slip and the calculated figure disagree, the reconciliation view shows the difference per security rather than leaving you to hunt for it.

Whether these dispositions belong on Schedule 3 at all is a separate question, and one the slip does not answer. See is a T5008 capital gains or investment income.

Frequently asked questions