Adjusted Cost Base

In this vignette, we will demonstrate that calculations of the adjusted cost base by cryptoTax closely follows those of https://www.adjustedcostbase.ca/.

Basic ACB

To begin, we will replicate the basic ACB example showcased in https://www.adjustedcostbase.ca/blog/how-to-calculate-adjusted-cost-base-acb-and-capital-gains/

We first generate the data:

library(cryptoTax)
data <- data_adjustedcostbase1
data
date transaction quantity price fees
2014-03-03 buy 100 50 10
2014-05-01 sell 50 120 10
2014-07-18 buy 50 130 10
2014-09-25 sell 40 90 10

Next, we generate the calculations to achieve the following result:

ACB(data, spot.rate = "price", sup.loss = FALSE)
date transaction quantity price fees total.price total.quantity ACB ACB.share gains
2014-03-03 buy 100 50 10 5000 100 5010 50.10 NA
2014-05-01 sell 50 120 10 6000 50 2505 50.10 3485
2014-07-18 buy 50 130 10 6500 100 9015 90.15 NA
2014-09-25 sell 40 90 10 3600 60 5409 90.15 -16

Superficial losses

We will now replicate the more advanced superficial loss example showcased at https://www.adjustedcostbase.ca/blog/what-is-the-superficial-loss-rule/.

Example 1

We first demonstrate the “Violation of the Superficial Loss Rule” by using regular ACB without accounting for superficial losses:

data <- data_adjustedcostbase2
ACB(data, spot.rate = "price", sup.loss = FALSE)
date transaction quantity price total.price fees total.quantity ACB ACB.share gains
2014-01-06 buy 100 50 5000 0 100 5000 50 NA
2014-11-03 sell 100 30 3000 0 0 0 0 -2000
2014-11-04 buy 100 30 3000 0 100 3000 30 NA
2015-12-02 sell 100 80 8000 0 0 0 0 5000

Next, we do it the correct way, accounting for superficial losses:

Per default, setting sup.loss = TRUE (the default) generates a lot of columns to provide as much information as possible. To make it look as short as the adjustedcostbase.ca example, we can subselect relevant columns:

library(dplyr)
#> Warning: package 'dplyr' was built under R version 4.2.2
ACB(data, spot.rate = "price") %>%
  select(date, transaction, quantity, price, total.quantity, ACB, ACB.share, gains)
date transaction quantity price total.quantity ACB ACB.share gains
2014-01-06 buy 100 50 100 5000 50 NA
2014-11-03 sell 100 30 0 0 0 NA
2014-11-04 buy 100 30 100 5000 50 NA
2015-12-02 sell 100 80 0 0 0 3000

Example 2

We continue with the second superficial loss example. We first demonstrate the “Violation of the Superficial Loss Rule” by using regular ACB without accounting for superficial losses:

data <- data_adjustedcostbase3
ACB(data, spot.rate = "price", sup.loss = FALSE)
date transaction quantity price total.price fees total.quantity ACB ACB.share gains
2014-01-06 buy 100 50 5000 0 100 5000 50 NA
2014-11-03 buy 100 30 3000 0 200 8000 40 NA
2014-11-04 sell 100 30 3000 0 100 4000 40 -1000
2015-12-02 sell 100 80 8000 0 0 0 0 4000

Next, we do it the correct way, accounting for superficial losses:

ACB(data, spot.rate = "price") %>%
  select(date, transaction, quantity, price, total.quantity, ACB, ACB.share, gains)
date transaction quantity price total.quantity ACB ACB.share gains
2014-01-06 buy 100 50 100 5000 50 NA
2014-11-03 buy 100 30 200 8000 40 NA
2014-11-04 sell 100 30 100 5000 50 NA
2015-12-02 sell 100 80 0 0 0 3000

Example 3

We continue with the third superficial loss example (first example in https://www.adjustedcostbase.ca/blog/applying-the-superficial-loss-rule-for-a-partial-disposition-of-shares/). We first demonstrate the “Violation of the Superficial Loss Rule” by using regular ACB without accounting for superficial losses:

When Shares are Sold at a Loss and then Partially Reacquired within the Superficial Loss Period

data <- data_adjustedcostbase4
ACB(data, spot.rate = "price", sup.loss = FALSE)
date transaction quantity price total.price fees total.quantity ACB ACB.share gains
2015-01-02 buy 100 3.0 300 0 100 300 3.0 NA
2015-04-09 sell 100 2.0 200 0 0 0 0.0 -100
2015-04-10 buy 25 2.2 55 0 25 55 2.2 NA

Next, we do it the correct way, accounting for superficial losses:

ACB(data, spot.rate = "price") %>%
  select(date, transaction, quantity, price, total.quantity, ACB, ACB.share, gains)
date transaction quantity price total.quantity ACB ACB.share gains
2015-01-02 buy 100 3.0 100 300 3.0 NA
2015-04-09 sell 100 2.0 0 0 0.0 -75
2015-04-10 buy 25 2.2 25 80 3.2 NA

Example 4

We continue with the fourth superficial loss example (second example in https://www.adjustedcostbase.ca/blog/applying-the-superficial-loss-rule-for-a-partial-disposition-of-shares/). We first demonstrate the “Violation of the Superficial Loss Rule” by using regular ACB without accounting for superficial losses:

When Shares are Purchased and then Partially Sold within the Superficial Loss Period

data <- data_adjustedcostbase5
ACB(data, spot.rate = "price", sup.loss = FALSE)
date transaction quantity price total.price fees total.quantity ACB ACB.share gains
2015-04-09 buy 100 3 300 0 100 300 3 NA
2015-04-10 sell 80 2 160 0 20 60 3 -80

Next, we do it the correct way, accounting for superficial losses:

ACB(data, spot.rate = "price") %>%
  select(date, transaction, quantity, price, total.quantity, ACB, ACB.share, gains)
date transaction quantity price total.quantity ACB ACB.share gains
2015-04-09 buy 100 3 100 300 3 NA
2015-04-10 sell 80 2 20 80 4 NA

Example 5

When Multiple Acquisitions and/or Multiple Dispositions Occur Within the Superficial Loss Period

There are no examples given for this one, so we make our own. adjustedcostbase.ca writes that the web-based application does not support claiming partial losses automatically:

Note that AdjustedCostBase.ca does not automatically apply the superficial loss rule for you. Although you’ll see superficial loss rule warnings being displayed in many cases, it’s up to you to edit the transaction to apply the superficial loss rule. Also, in cases where you’re partially claiming a loss due to the superficial loss rule, you’ll need to manually calculate the partial capital loss using the methods described above.

Fortunately, cryptoTax allows claiming partial losses automatically. We first demonstrate the “Violation of the Superficial Loss Rule” by using regular ACB without accounting for superficial losses:

data <- data_adjustedcostbase6
ACB(data, spot.rate = "price", sup.loss = FALSE)
date transaction quantity price total.price fees total.quantity ACB ACB.share gains
2015-04-09 buy 150 3 450 0 150 450 3 NA
2015-04-10 sell 20 2 40 0 130 390 3 -20
2015-04-15 buy 50 3 150 0 180 540 3 NA
2015-04-20 sell 10 2 20 0 170 510 3 -10
2015-05-15 sell 80 2 160 0 90 270 3 -80

Next, we do it the correct way, accounting for superficial losses, and include a few more columns for the demonstration:

ACB(data, spot.rate = "price") %>%
  select(
    date, transaction, quantity, price, total.quantity,
    suploss.range, sup.loss, sup.loss.quantity, ACB, ACB.share,
    gains.uncorrected, gains.sup, gains.excess, gains
  )
date transaction quantity price total.quantity suploss.range sup.loss sup.loss.quantity ACB ACB.share gains.uncorrected gains.sup gains.excess gains
2015-04-09 buy 150 3 150 2015-03-10 UTC–2015-05-09 UTC FALSE 0 450.0000 3.000000 0.00000 NA NA NA
2015-04-10 sell 20 2 130 2015-03-11 UTC–2015-05-10 UTC TRUE 20 410.0000 3.153846 -20.00000 -20.00000 NA NA
2015-04-15 buy 50 3 180 2015-03-16 UTC–2015-05-15 UTC FALSE 0 580.0000 3.222222 0.00000 NA NA NA
2015-04-20 sell 10 2 170 2015-03-21 UTC–2015-05-20 UTC TRUE 10 560.0000 3.294118 -12.22222 -12.22222 NA NA
2015-05-15 sell 80 2 90 2015-04-15 UTC–2015-06-14 UTC TRUE 80 361.1765 4.013072 -103.52941 -64.70588 -38.82353 -38.82353

Other examples from the internet

CryptoTaxCalculator

Example 1

Here is an example from CryptoTaxCalculator, showcased at: https://cryptotaxcalculator.io/guides/crypto-tax-canada-cra/. We first demonstrate the “Violation of the Superficial Loss Rule” by using regular ACB without accounting for superficial losses:

data <- data_cryptotaxcalculator1
ACB(data, transaction = "trade", spot.rate = "price", sup.loss = FALSE)
date trade currency price quantity total.price fees total.quantity ACB ACB.share gains
2020-01-01 buy BTC 5000 2 10000 0 2 10000 5000 NA
2020-02-03 sell BTC 3000 2 6000 0 0 0 0 -4000
2020-02-04 buy BTC 3000 2 6000 0 2 6000 3000 NA
2021-02-04 sell BTC 10000 2 20000 0 0 0 0 14000

Next, we do it the correct way, accounting for superficial losses:

ACB(data, transaction = "trade", spot.rate = "price") %>%
  select(date, trade, price, quantity, total.quantity, ACB, ACB.share, gains)
date trade price quantity total.quantity ACB ACB.share gains
2020-01-01 buy 5000 2 2 10000 5000 NA
2020-02-03 sell 3000 2 0 0 0 NA
2020-02-04 buy 3000 2 2 10000 5000 NA
2021-02-04 sell 10000 2 0 0 0 10000

Example 2

We continue with the second superficial loss example. We first demonstrate the “Violation of the Superficial Loss Rule” by using regular ACB without accounting for superficial losses:

data <- data_cryptotaxcalculator2
ACB(data, transaction = "trade", spot.rate = "price", sup.loss = FALSE)
date trade currency price quantity total.price fees total.quantity ACB ACB.share gains
2020-01-01 buy BTC 5000 2 10000 0 2 10000 5000 NA
2020-02-05 buy BTC 1000 2 2000 0 4 12000 3000 NA
2020-02-06 sell BTC 1000 2 2000 0 2 6000 3000 -4000
2021-02-06 sell BTC 10000 2 20000 0 0 0 0 14000

Next, we do it the correct way, accounting for superficial losses:

ACB(data, transaction = "trade", spot.rate = "price") %>%
  select(date, trade, price, quantity, total.quantity, ACB, ACB.share, gains)
date trade price quantity total.quantity ACB ACB.share gains
2020-01-01 buy 5000 2 2 10000 5000 NA
2020-02-05 buy 1000 2 4 12000 3000 NA
2020-02-06 sell 1000 2 2 10000 5000 NA
2021-02-06 sell 10000 2 0 0 0 10000

Coinpanda

Example 1

Here is an example from Coinpanda, showcased at: https://coinpanda.io/blog/crypto-taxes-canada-adjusted-cost-base/. The first example does not require the superficial loss rule so we can set it to FALSE without worry.

data <- data_coinpanda1
ACB(data,
  transaction = "type", quantity = "amount",
  total.price = "price", sup.loss = FALSE
)
type date currency amount price fees total.quantity ACB ACB.share gains
buy 2019-08-14 BTC 0.2 1800 20 0.2 1820 9100.000 NA
buy 2019-10-29 BTC 0.6 4300 20 0.8 6140 7675.000 NA
sell 2020-06-05 BTC 0.8 5700 0 0.0 0 0.000 -440
buy 2020-09-23 BTC 1.2 8200 0 1.2 8200 6833.333 NA

Example 2

We continue with the second superficial loss example. We first demonstrate the “Violation of the Superficial Loss Rule” by using regular ACB without accounting for superficial losses:

data <- data_coinpanda2
ACB(data,
  transaction = "type", quantity = "amount",
  total.price = "price", sup.loss = FALSE
)
type date currency amount price fees total.quantity ACB ACB.share gains
buy 2019-08-14 BTC 0.2 1800 20 0.2 1820 9100.000 NA
buy 2019-10-29 BTC 0.6 4300 20 0.8 6140 7675.000 NA
sell 2020-06-05 BTC 0.8 5700 0 0.0 0 0.000 -440
buy 2020-06-07 BTC 1.2 7000 0 1.2 7000 5833.333 NA

Next, we do it the correct way, accounting for superficial losses:

ACB(data, transaction = "type", quantity = "amount", total.price = "price") %>%
  select(type, date, amount, price, fees, ACB, ACB.share, gains)
type date amount price fees ACB ACB.share gains
buy 2019-08-14 0.2 1800 20 1820 9100 NA
buy 2019-10-29 0.6 4300 20 6140 7675 NA
sell 2020-06-05 0.8 5700 0 0 0 NA
buy 2020-06-07 1.2 7000 0 7440 6200 NA

Koinly

Here is an example from Koinly, showcased at: https://koinly.io/blog/calculating-crypto-taxes-canada/. We first demonstrate the “Violation of the Superficial Loss Rule” by using regular ACB without accounting for superficial losses:

data <- data_koinly
ACB(data, sup.loss = FALSE)
date transaction currency quantity spot.rate total.price fees total.quantity ACB ACB.share gains
2019-01-06 buy ETH 100 50 5000 0 100 5000 50 NA
2019-11-03 sell ETH 100 30 3000 0 0 0 0 -2000
2019-11-04 buy ETH 100 30 3000 0 100 3000 30 NA

Next, we do it the correct way, accounting for superficial losses:

ACB(data) %>%
  select(date, transaction, quantity, spot.rate, total.quantity, ACB, ACB.share, gains)
date transaction quantity spot.rate total.quantity ACB ACB.share gains
2019-01-06 buy 100 50 100 5000 50 NA
2019-11-03 sell 100 30 0 0 0 NA
2019-11-04 buy 100 30 100 5000 50 NA