Glossary of Terms

The total cost of an investment, adjusted for various factors like return of capital distributions, stock splits, and reinvested dividends. ACB is used to calculate capital gains or losses when you sell.

Your adjusted cost base divided by the number of units you hold. This is the average cost per share/unit after all adjustments.

A symmetric encryption algorithm that uses a 256-bit key to protect data. AES-256 is widely considered the gold standard for data encryption and is used by governments, banks, and financial institutions worldwide. It would take billions of years to crack with current technology.

The profit from selling an investment for more than its adjusted cost base. In Canada, only 50% of capital gains are included in taxable income (inclusion rate may change).

The loss from selling an investment for less than its adjusted cost base. Capital losses can be used to offset capital gains in the current year, carried back 3 years, or carried forward indefinitely.

A 9-character alphanumeric code that uniquely identifies a security (stocks, bonds, ETFs). CUSIP stands for Committee on Uniform Securities Identification Procedures.

Canada's national securities depository, clearing and settlement hub. CDS provides the authoritative data on distribution breakdowns for Canadian securities.

A plan that automatically reinvests dividends to purchase additional shares instead of paying cash. These reinvested dividends increase your ACB.

Payments made by mutual funds, ETFs, or trusts to unitholders. Distributions can include various components: dividends, interest, capital gains, foreign income, and return of capital.

An investment fund traded on stock exchanges that holds assets like stocks, bonds, or commodities. ETFs often have complex distributions that require ACB tracking.

Dividends paid by Canadian public corporations that qualify for an enhanced dividend tax credit. They are "grossed up" by 38% for tax purposes but receive a larger tax credit.

The protection of data while it is stored on disk, in a database, or on backup media. Encryption at rest ensures that even if someone gains physical access to the storage hardware, the data remains unreadable without the proper decryption keys. ACB Platform uses AES-256 encryption at rest for all stored data.

The protection of data as it moves between your browser and our servers, or between internal services. Encryption in transit uses TLS (Transport Layer Security) to create an encrypted tunnel, preventing anyone from intercepting or reading the data as it travels across the internet.

Income from foreign sources such as dividends from non-Canadian companies. May qualify for a foreign tax credit if foreign taxes were withheld.

The secure version of HTTP, which is the protocol used to transfer data between your browser and a website. HTTPS uses TLS encryption to ensure that all communication is private and tamper-proof. You can verify a site uses HTTPS by looking for the padlock icon in your browser's address bar.

Dividends paid by Canadian private corporations or from income that has benefited from the small business deduction. Grossed up by 15% with a smaller tax credit than eligible dividends.

A distribution component that doesn't fit other categories. Taxed as regular income at your marginal rate.

Canada's federal privacy law that governs how private-sector organizations collect, use, and disclose personal information in the course of commercial activities. PIPEDA requires organizations to obtain consent, limit collection to what is necessary, and protect personal data with appropriate security safeguards.

A distribution that returns part of your original investment. ROC is not immediately taxable but reduces your ACB. When your ACB reaches zero, further ROC becomes a taxable capital gain.

A company that owns, operates, or finances income-producing real estate. REITs often have significant return of capital in their distributions.

A capital loss that is denied for tax purposes because you (or an affiliated person) acquired identical property within 30 days before or after the sale, and still hold it 30 days after the sale. The denied loss is added to the ACB of the replacement property.

When a company divides its existing shares into multiple shares. A 2:1 split doubles your shares but halves the price per share. Your total ACB remains the same, but ACB per unit is reduced proportionally.

The CRA tax form used to report capital gains and losses from the sale of capital property, including stocks, bonds, mutual funds, and real estate.

Statement of Trust Income Allocations and Designations. Issued by trusts (including many ETFs) to report various types of income allocated to beneficiaries.

Statement of Investment Income. Reports interest, dividends, and other investment income from Canadian sources.

Statement of Partnership Income. Issued by limited partnerships to report your share of partnership income, deductions, and credits.

A cryptographic protocol that provides secure communication over the internet. TLS is the successor to SSL and is the technology behind HTTPS. It authenticates the server, encrypts all data in transit, and ensures messages cannot be tampered with. ACB Platform enforces TLS 1.2 or higher on all connections.

A security method that requires two different forms of identification before granting access to an account. Typically this combines something you know (your password) with something you have (a code from an authenticator app or SMS). 2FA significantly reduces the risk of unauthorized access even if your password is compromised.