Quick answer
In Canada, every BTC purchase you make changes the average cost of all your BTC — that's the ACB method.
Accounting
Canada
Adjusted Cost Base
Canada's method for calculating the average cost of all identical crypto units held, used to determine capital gains.
CanadaUnderstanding Adjusted Cost Base on crypto
The Adjusted Cost Base (ACB) is Canada's required method for calculating the cost basis of identical properties — including cryptocurrency. Under ACB, all units of the same cryptocurrency are treated as a single pool, and the average cost per unit is recalculated with each new purchase. When units are sold, the capital gain is calculated using the average ACB at the time of disposal — not the cost of any specific purchase. This is similar to HMRC's Section 104 pooling rules in the UK. The ACB increases with each purchase (total cost ÷ total units) and the gain on disposal is proceeds minus (ACB per unit × units sold).
The Adjusted Cost Base (ACB) is Canada's required method for calculating the cost basis of identical properties — including cryptocurrency. Under ACB, all units of the same cryptocurrency are treated as a single pool, and the average cost per unit is recalculated with each new purchase. When units are sold, the capital gain is calculated using the average ACB at the time of disposal — not the cost of any specific purchase. This is similar to HMRC's Section 104 pooling rules in the UK. The ACB increases with each purchase (total cost ÷ total units) and the gain on disposal is proceeds minus (ACB per unit × units sold).
What this means for your crypto activity
Running average cost
Every purchase of additional BTC, ETH, or any other crypto changes the ACB of your entire holding of that crypto.
Maintain ACB records
You must maintain a running ACB calculation — or use crypto tax software that does it automatically.
Sell and rebuy effects
Selling and rebuying the same crypto affects the ACB of the remaining holding.
Superficial loss rule
The 'superficial loss' rule (analogous to the UK 30-day rule) may disallow losses if you repurchase within 30 days.
Gain calculation
Capital gains are calculated as proceeds minus ACB at the time of disposal.
- Every purchase of additional BTC, ETH, or any other crypto changes the ACB of your entire holding of that crypto.
- You must maintain a running ACB calculation — or use crypto tax software that does it automatically.
- Selling and rebuying the same crypto affects the ACB of the remaining holding.
- The 'superficial loss' rule (analogous to the UK 30-day rule) may disallow losses if you repurchase within 30 days.
- Capital gains are calculated as proceeds minus ACB at the time of disposal.
Seeing it in action
Example scenario
Marie buys 1 BTC at CAD $30,000 (ACB: $30,000, 1 unit, $30,000/unit). She buys another 1 BTC at $40,000. New ACB: ($30,000 + $40,000) / 2 = $35,000 per unit. She sells 1 BTC at $50,000. Her capital gain = $50,000 − $35,000 = $15,000. Only 50% ($7,500) is included in income under Canada's capital gains inclusion rate.
How this works across jurisdictions
- Canada
ACB is the required cost basis method for identical properties under Canadian income tax; superficial loss rule (30-day repurchase) applies to prevent artificial loss creation; 50% capital gains inclusion rate applies to ACB-calculated gains.
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