Stock splits and your cost base

A split hands you more shares worth the same total — so your total cost base doesn’t move, but your per-share number does. Here’s what to adjust.

Updated July 2026 · 5 min read

A plain split isn’t a disposition

In a conventional stock split, you receive additional shares in proportion to what you hold — a 2-for-1 split doubles your share count. You haven’t sold anything, so there’s no capital gain or loss and no tax event. Your total ACB is unchanged.

What actually changes

Only the per-share cost base changes, because the same total cost is now spread over more shares.

Worked example. You own 100 shares with a total ACB of $5,000 — $50 per share. After a 2-for-1 split you hold 200 shares. Total ACB is still $5,000; per-share ACB is now $25. Sell 50 shares and you use $25 each, not $50.

Reverse splits

A reverse split (e.g. 1-for-10) works the same way in the other direction: fewer shares, higher per-share ACB, unchanged total. Watch for fractional shares paid out in cash — that small cash-in-lieu payment is a disposition and can create a tiny gain or loss you need to report.

Splits vs. stock dividends

A stock dividend can look like a split but is treated differently: it may carry an income inclusion and add to your ACB by the amount included. Read the corporate action carefully — “you got more shares” doesn’t always mean “nothing to report.”

Frequently asked

Does a stock split change my adjusted cost base?

Your total ACB stays the same; only the per-share ACB changes because the same total cost is spread over more (or fewer) shares. A plain split is not a taxable event.

Is a stock split a taxable event in Canada?

No. You receive additional shares in proportion to your holding without disposing of anything, so there is no capital gain or loss. The exception is cash paid in lieu of fractional shares, which is a small disposition.

How is a reverse split treated?

The same way as a forward split in reverse — fewer shares, a higher per-share cost base, and an unchanged total ACB. Any fractional shares cashed out are a disposition you report.

Keep reading
Spin-off tax in CanadaWhat is adjusted cost base?How to fill out Schedule 3

Educational information, not tax advice. Rules summarized here can change and may not fit your situation — always confirm your capital gains reporting with a qualified Canadian accountant.

Not tax or legal advice. Always confirm capital gains reporting with a qualified accountant. · Made with love in Canada 🇨🇦
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