Form T5008: Statement of Securities Transactions, ACB, and Schedule 3

Form T5008, the Statement of Securities Transactions, is the slip your broker or financial institution sends you and the Canada Revenue Agency to report securities you sold, redeemed, or exchanged during the year.¹ The slip does not calculate your capital gain or loss. It gives you the proceeds and sometimes a cost figure, and you are responsible for working out the real adjusted cost base and reporting the gain or loss on Schedule 3.

You will receive a T5008 for stocks, bonds, mutual fund units, options, warrants, futures, precious metals, equity-linked notes, and bearer debt obligations.² Issuers must send the slip by the last day of February following the year the transaction took place.³ The date on the slip is the settlement date, not the trade date.

What the Boxes Actually Mean

Two boxes drive your tax calculation, and taxpayers routinely confuse which is which.

Box 21 – Proceeds of disposition or settlement amount. The gross amount you received from the sale. Issuers do not deduct commissions or selling expenses here.³
Box 20 – Cost or book value. Intended to show your original cost including purchase commissions, adjusted for reinvested distributions and returns of capital. In practice this box is often blank or incomplete, because your broker may not have your full purchase history.³
Box 15 – Type code. A short code identifying what you sold: SHS for shares, MFT for mutual fund trust units, BON for bonds, OPC for option contracts, FUT for futures.²
Box 16 – Quantity. Number of units in the transaction.
Box 17 – Identification. A written description of the security.
Box 18 – ISIN or CUSIP number. The standard identifier for the security.
Box 14 – Date. The settlement month and day. If the slip aggregates identical transactions across the year, this box shows December 31.³

The CRA states plainly that the amount in Box 20 “may or may not reflect your adjusted cost base” and that you are responsible for any adjustments.¹ Treat Box 20 as a starting point. Your own records are what determine the correct cost.

Calculating Your Adjusted Cost Base

The adjusted cost base (ACB) is the real cost of acquiring a security once you fold in purchase commissions, reinvested distributions, returns of capital, and any corporate reorganization adjustments. Every dollar you underestimate here becomes a dollar of overtaxed gain.

Averaging Identical Securities

When you buy the same security at different prices over time, you cannot pick which shares you sold. The CRA requires an average cost method for identical properties: each time you buy more, divide the total cost of all units held by the total number of units, and that running average is your per-unit ACB.⁴

Say you buy 100 shares at $20, then 100 more at $30. Your total cost is $5,000 for 200 shares, so your ACB per share is $25. Sell 50 shares and you report an ACB of $1,250, regardless of which lot you think went. Brokerage commissions on each purchase fold into total cost before averaging.

Reinvested Distributions and Return of Capital

Mutual fund holders face an extra wrinkle. When a fund reinvests distributions to buy you more units, those reinvested amounts increase your ACB. Ignore them and you pay tax twice: once when the distribution is reported on your T3 or T5, and again when you sell units at an understated cost.

Return of capital runs the other way and reduces your ACB. On a T3 slip, Box 42 shows the cost base adjustment: a positive amount is subtracted from your ACB, a negative amount is added. If return of capital reductions push your ACB below zero during the year, the negative amount is treated as a capital gain reported on Schedule 3 even though you did not sell anything.⁵

Financial institutions rarely track these adjustments for you. Keep every T3 and T5 you receive over the life of the investment, because you will need them to rebuild an accurate ACB when the T5008 for the sale finally arrives.

Reporting on Schedule 3

Schedule 3, Capital Gains or Losses, is where T5008 data lands. Most of what you report on Schedule 3 comes from T5008 slips.⁶ For each disposition you fill in five columns:

Year acquired.
Proceeds of disposition (Box 21 of the T5008).
Your calculated adjusted cost base.
Outlays and expenses, such as selling commissions.
Capital gain or loss (proceeds minus ACB minus outlays).

Securities go on different lines depending on type. Publicly traded shares and mutual fund units use line 13199 for proceeds and line 13200 for the gain or loss. Bonds and debentures use line 15199 and line 15300.⁶ The net taxable capital gain flows to line 12700 of your T1.

Only part of your capital gain is taxed. For 2026 the inclusion rate is one-half: a $10,000 gain means $5,000 is included in income at your marginal rate.⁷ The same fraction limits losses: only half of a realized loss is an allowable capital loss that can offset taxable gains. A proposal in 2024 to raise the rate to two-thirds on gains above $250,000 for individuals was cancelled in March 2025, and the CRA continues to administer the one-half rate.⁸

If allowable losses exceed taxable gains for the year, the excess is a net capital loss. You can carry it back to any of the three preceding tax years using Form T1A, or carry it forward indefinitely and claim it on line 25300 in a future year.⁹

Foreign Currency Transactions

When your T5008 reports a transaction in a foreign currency, convert both the proceeds and your cost to Canadian dollars before reporting on Schedule 3. Use the Bank of Canada exchange rate for the specific day each amount arose: settlement date for proceeds, original purchase date for cost.¹⁰ If the Bank of Canada did not quote a rate that day, use the closest preceding day that has one.

The CRA may accept an average exchange rate over a period for certain income items, but not where rates fluctuated significantly during that period.¹⁰ Using the specific daily rate is the safest route. Keep a record of every rate you used.

Because proceeds and cost are converted at different days’ rates, part of the gain or loss you report can come from currency movement rather than the security itself. Schedule 3 has no separate line for this. The currency effect simply sits inside the reported capital gain or loss.

The Superficial Loss Rule

Sell a security at a loss and then buy it back too quickly and the CRA may deny the loss entirely. A superficial loss arises when both of these are true:

You or an affiliated person buys the same or identical property during the window that starts 30 calendar days before the sale and ends 30 calendar days after.
You or the affiliated person still owns that property 30 calendar days after the sale.

Affiliated persons include your spouse or common-law partner, a corporation controlled by you or your spouse, and certain partnerships and trusts where you hold a majority interest. The denied loss is not lost permanently. If you are the person who acquired the replacement property, the disallowed loss is added to the ACB of that replacement, so you recover it when you eventually sell.¹¹

This rule catches investors who sell a stock in December to harvest a loss and buy it back in early January. Unless 30 full days pass after the sale before you buy back in, the loss is superficial. Your T5008 will still show the disposition, but the loss cannot be claimed on Schedule 3.

What to Do When the Slip Is Wrong or Incomplete

A blank or inaccurate Box 20 is the most common T5008 problem. Brokers often do not have your historical purchase cost, especially for securities transferred in from another institution. This is not a defect to argue about with the CRA; the agency places responsibility for the correct ACB on you.¹ Keep every trade confirmation, brokerage statement, and commission receipt for the whole time you hold the investment. For mutual funds, keep annual T3 and T5 slips showing reinvested distributions and return of capital.

If Box 21 (proceeds) is wrong, contact the issuer and request an amended T5008. The issuer is responsible for correcting data filed with the CRA. If you cannot get an amended slip before your filing deadline, report the correct figures on Schedule 3 and attach a note explaining the discrepancy and the steps you have taken. Your own documents are what justify your numbers, even when they differ from what the broker filed.

Worthless Securities With No T5008

Sometimes a security becomes worthless while you still hold it. No sale occurs, so no T5008 is issued, yet the loss is real. Subsection 50(1) of the Income Tax Act lets you elect to treat the shares as sold for zero proceeds at the end of the year, if one of these applies:

The issuing corporation went bankrupt during the year.
The corporation is insolvent and a winding-up order has been issued.
The corporation is insolvent, no longer carries on business, the shares have no fair market value, and it is reasonable to expect the corporation will be dissolved.

Under the election, you are deemed to have disposed of the shares for nil and reacquired them at nil immediately afterward.¹² Your capital loss equals your full ACB. There is no prescribed form. You make the election by attaching a signed letter to your return identifying the corporation, the number and class of shares, and your ACB. Electronic filers submit the letter separately in writing.

T5008 Slips From Registered Accounts

Issuers are generally not required to file T5008 slips for transactions inside registered plans that are tax-exempt under section 149 of the Income Tax Act, but some brokers send them anyway as part of standard reporting.³ If you receive a T5008 for a transaction entirely inside a TFSA, RRSP, or RRIF, you do not report it on Schedule 3. Gains and losses inside those accounts are not taxable events. File the slip away, unless the account has lost its registered status through over-contribution or a prohibited investment.

Penalties for Missing a T5008

The CRA receives T5008 data directly from your broker, so unreported dispositions are easy to flag. If you fail to report $500 or more of income on your return and also failed to report income in any of the three preceding tax years, the CRA can assess a repeated failure penalty. The penalty is the lesser of 10% of the unreported amount or 50% of the difference between the understated tax and any tax already withheld on that amount.¹³

If the CRA finds you knowingly made a false statement or omitted income through gross negligence, the penalty is the greater of $100 or 50% of the understated tax related to the false statement.¹³ Interest accrues on any unpaid balance from the original due date.

If you discover a past error, the Voluntary Disclosures Program may allow you to correct your filings with reduced or waived penalties, provided you come forward before the CRA contacts you.¹⁴ The program was updated effective October 1, 2025, so check the current requirements before applying.

1
Canada Revenue Agency. T5008 Statement of Securities Transactions – Slip Information for Individuals
2
Canada Revenue Agency. Return of Securities Transactions T5008 – T5008 Slip
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Canada Revenue Agency. T5008 Guide – Return of Securities Transactions
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Canada Revenue Agency. Special Rules and Other Transactions
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Canada Revenue Agency. Tax Treatment of Mutual Funds
6
Canada Revenue Agency. Completing Schedule 3
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Canada Revenue Agency. Update on the Canada Revenue Agency’s Administration of the Proposed Capital Gains Taxation Changes
8
Prime Minister of Canada. Prime Minister Mark Carney Cancels Proposed Capital Gains Tax Increase
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Canada Revenue Agency. Line 25300 – Net Capital Losses of Other Years
10
Canada Revenue Agency. Income Tax Folio S5-F4-C1 – Income Tax Reporting Currency
11
Canada Revenue Agency. Capital Losses
12
Justice Laws Website. Income Tax Act RSC 1985 c 1 (5th Supp) – Section 50
13
Canada Revenue Agency. False Reporting or Repeated Failure to Report Income
14
Canada Revenue Agency. Voluntary Disclosures Program