# ACB - Joint Account and Individual Account



## bariutt (Feb 2, 2013)

My wife and I have 2 non registered investment accounts. One account is a joint account (in her name and my name). The second account is just in my wife's name. 

We have many of the stocks (e.g. TD/EMA/RY etc.) in both accounts.

For taxation purposes what is the correct method of calculating adjusted cost base? I have been calculating the ACB for each stock considering both accounts together but I am not sure if this is the correct approach?

I am wondering now if I should be calculating the ACB for each account separately,

Any advice would be appreciated.


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## mordko (Jan 23, 2016)

1. Don't ever use joint investment accounts. Get rid of this one.

2. Get an accountant to sort this mess.

3. IMHO, you absolutely do need to consider accounts together. When doing it, I would assume that 50 percent of shares of each stock in the joint account are owned by you and 50% are owned by your wife. You also need to figure out if this split is commencerate with your incomes.


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## Eclectic12 (Oct 20, 2010)

bariutt said:


> ... For taxation purposes what is the correct method of calculating adjusted cost base? I have been calculating the ACB for each stock considering both accounts together but I am not sure if this is the correct approach?


My understanding is across both taxable accounts is correct for the ACB (I have to do similar having the same stock in two different taxable accounts).

From what I have read, the tricky part is that when there is more than one owner putting funds into the account, sales in that account have to be split according to who funded what.

For example, sell shares in the "your name, only you put money in" account, then 100% of the capital gain (or loss) gets reported on your tax return. Sell the same number of shares in the joint account where your wife put in 40% and you put in 60%. The total will still be the same, 40% of the CG is on her tax return and 60% is on yours.


For this reason, some have posted that they have both names on the account but to keep thinks simple, only one spouse funds the joint account so that 100% of the gains/losses go on the funding spouse's tax return.


Cheers


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## OnlyMyOpinion (Sep 1, 2013)

If different individuals own the accounts then you would calculate ACB separately. The joint acc does complicate things. If you contributed to the jt acc to buy TD and your wife owns TD in her individual acc then you could track and use different ACB's, but you need to be able to justify the contribution and TD purchases in the joint acc as yours. 

I don't agree with Mordko about never using jt accs, but be aware that attribution rules apply. Joint accounts have value because they pass to the survivor outside of the estate and remain accessable. You just need to be able to justify who is reporting income/gains from the account based on contributions to the account.

We have only one joint chequing acc and one joint investment account. Years ago we became aware of the attribution rules and had to go back through our incomes over the years (easy if you've kept all your T1s) to ensure that the assets generating annual interest/dividend income or cap gains were allocated in proportion to the income we had contributed. After that it was easy to track on a go-forward basis. Remember, it is acceptable for one of you to contribute all of your income to the jt acc (usually benficial for the lower income one) while the other pays all expenses.


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## mordko (Jan 23, 2016)

We have a joint bank account. That is indeed very useful because we have joint finances. There is no accounting trouble because there is no income of any significance. 

Still have trouble figuring out any benefits from having a joint investment account other than a huge pain in the backside relating to taxation.


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## Eclectic12 (Oct 20, 2010)

This link says because of joint ownership - on death of one owner ... no taxes are due, the account is not part of the estate (avoiding probate process/fees) and the surviving owner has full access/control. Assuming nothing is different for one's tax jurisdiction, these sound like good benefits.
https://retirehappy.ca/joint-ownership-of-bank-accounts-and-investment-accounts/#


As for the taxation headache, some say they avoid the whole taxation issue by having two owners on the account but only one owner funding it to simplify the tax reporting to a single owner/tax return.


Cheers


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## mordko (Jan 23, 2016)

Ok, understand why a person in his late 60s would need this as part of his estate planning.


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## Spudd (Oct 11, 2011)

When we sold our house we opened a joint investment account to store the money from the sale. We know that it's 50/50 because it's funded entirely from house money and we ensure we always keep it that way (i.e. we each took 5500 for our TFSA's this month, although I didn't need it from there, it kept it clean). I suppose we could have just each taken half of the money into our own personal accounts but then we'd have to make double the investment decisions and we wouldn't each have visibility to it.


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