RSU vests, ESPP purchases, and stock option exercises set your adjusted cost base at fair market value on the event date — the benefit was already taxed on your T4. See your T4 amount and the ACB the CRA expects on Schedule 3, and how much double tax you avoid by getting it right. Nothing here is uploaded; it only lives in this page.
The fair market value of the shares on the vest date. That full amount is taxed as employment income on your T4 in the vest year, and the same amount becomes your adjusted cost base. If you report an ACB of $0 when you sell, you pay tax on the same money twice.
The discount (fair market value minus what you paid) is an employment benefit taxed on your T4 in the purchase year — it is never a capital gain. Your ACB is the full fair market value on the purchase date: the amount you paid plus the taxed discount.
No. The paragraph 110(1)(d) deduction reduces the taxable amount of the option benefit on your return, but your adjusted cost base stays at the full fair market value on the exercise date. The deduction and the ACB are calculated independently.
Brokers often report the exercise price, the discounted ESPP price, or nothing at all in the cost box, because they don't know your employment benefit was already taxed. The T5008 cost box is not authoritative — you are responsible for reporting the correct ACB (fair market value on the event date) on Schedule 3.
Convert the fair market value using the Bank of Canada rate on the event date (vest, purchase, or exercise date) — not the rate on the day you sell. The sale proceeds are converted at the sale-date rate, which is how currency movement itself becomes a capital gain or loss.
Educational information, not tax advice. Always cross-check against your T4 and confirm reporting with a qualified accountant.
Sched3 records every vest, purchase, and exercise at the correct FMV cost base, pools them with your regular lots, and carries the right ACB into your Schedule 3 — alongside superficial-loss detection and T5008 reconciliation.
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