This information is provided for Canadian tax filing purposes, and conforms to standards outlined by the Canada Revenue Agency. All figures are quoted in CAD. For further information on how capital gains / losses are treated under Canadian tax code,
please refer to
T4037(E).
- Proceeds are defined as the amount of money received for selling capital property. If this is in foreign currency terms, it is converted to CAD using the FX rate on the sale date.
- ACB (Adjusted Cost Base) is defined as the cost of capital property, plus any expenses to acquire it. If this is in foreign currency terms, it is converted to CAD using the FX rate on the purchase date.
- Outlays and expenses are the amounts that are incurred to sell capital property. They are deducted from the proceeds of disposition when calculating your capital gain or loss. If this is in foreign currency terms, it is converted to CAD using the FX rate on the sale date.
- Capital Gain / Loss is calculated by subtracting the ACB, and any outlays and expenses incurred to sell capital property, from the proceeds of disposition. If the resulting figure is positive, it is a capital gain. If the figure is negative, it is a capital loss.
When comparing the results of this calculator to other records, such as those from other calculators or those self kept, there may be discrepancies that arise due to differences in methodology.
- Direct FX Quotes: This calculator uses direct currency quotes (price of one unit of foreign currency is expressed in terms of the domestic currency). This is in contract to indirect currency quotes (price of one unit of domestic currency is expressed in terms of foreign currency).
If another calculation is done using an indirect quote, there will be a discrepancies in end results. This is because currencies are quoted in terms of 4 decimal places, yet the reciprocal is needed to accurately convert between them.
For example, if 1 USD = 1.3565, for no information to be lost, 1 CAD would need to be calculated as (1 / 1.3565) = 0.737191301..., however, it is likely the indirect quote was given as 0.7372. While both methods are valid, the direct approach is preferred, as it is the official rate that the Bank of Canada publishes.
- Rounding: There may be cases when rounding methodologies differ between this calculator and other calculators or brokerages. For example, in this calculator, principal amounts are not rounded to the nearest cent, whereas ECN fees and commissions are.
- ECN Fees: It is important to note how ECN fees are handled, as misconceptions could lead to incorrect results. The 'incur ECN' checkboxes are intended to specify wheather or not ECN fees will be levied on the full quantity of the trade (round lots and odd lots).
If left unchecked, ECN fees will still be levied against odd lots. For cases where you wish to have no ECN fees levied at all, the ECN parameters within the fee schedule should be adjusted to 0.
For any further questions regarding methodology, or to request new features, please contact me at
daniel.boctor@ontariotechu.net.