Rebuild your adjusted cost base from years of dividend reinvestment plan (DRIP) purchases. Enter each reinvestment to find your true ACB and avoid overpaying capital gains tax.
Enter each dividend reinvestment. The dividend amount is the total cash dividend that was reinvested into new shares. The share price is what the DRIP purchased at (usually the closing price on the dividend date or a slight discount).
Every time a dividend is reinvested through a DRIP, you are purchasing additional shares. Each purchase has a cost — the market price on the dividend date. This cost is added to your adjusted cost base (ACB), reducing your capital gain when you eventually sell.
Many investors forget this after years of DRIP and report only their original purchase as ACB. This dramatically overstates the capital gain and results in paying hundreds or even thousands of dollars more in tax than legally required.
This tool helps you reconstruct the ACB by entering each DRIP reinvestment. The running total at the bottom is your true cost base. You can verify the result by comparing the calculated share count to your broker statement — if they match, your ACB reconstruction is complete.
Every DRIP reinvestment is a purchase. Each time a dividend is reinvested, you acquire additional shares at the market price — this increases your total ACB. If you sell without accounting for DRIP, you report a much lower ACB than reality, resulting in a larger capital gain and more tax than you actually owe.
It depends on how long you held the stock and the dividend yield. A $10,000 investment in a 4% yielding stock over 15 years accumulates roughly $8,000 in DRIP ACB. At a 50% inclusion rate and 40% marginal rate, that is $1,600 in unnecessary tax. For larger positions or higher yields, the cost is proportionally greater.
Check your broker's transaction history or dividend history — most keep records for 7+ years online. You can also check old tax slips (T3/T5) which show dividend amounts, or contact your broker/transfer agent for historical records. Some companies (like utilities) have transfer agents who maintain full DRIP history.
Most DRIP plans use the volume-weighted average price (VWAP) on the dividend payment date. Some offer a discount (typically 1-5%). Your broker's transaction record should show the exact price per share for each reinvestment. If unavailable, the closing price on the payment date is a reasonable estimate.
A stock split changes the number of shares but not the total ACB. After a 2-for-1 split, you have twice the shares at half the ACB per share. The total ACB remains the same. Make sure you account for splits when entering your original purchase quantity — enter the pre-split number if entering DRIP data from before the split.