Calculating the average cost of property

The average cost is calculated by dividing the total cost of identical properties purchased (this is usually the cost of the property plus any expenses involved in acquiring it) by the total number of identical properties owned. 

Any amount reported in box 42, "Amount resulting in cost base adjustment", of the T3 slip represents a change in the capital balance of the mutual fund trust. This amount is used when calculating the adjusted cost base (ACB) reported on Schedule 3, Capital gains (or losses) for the property in the year of disposition. For more information and an example of the calculation, see Tax Treatment of Mutual Funds.

You also use this method to calculate the average cost of identical bonds or debentures you bought after 1971. However, the average cost is based on the principal amount for each identical property, that is, the amount before any interest or premiums are added. For more details, see Examples of calculating the average cost.

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