Calculate Average Cost Basis (ACB)
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Table of Contents
ACB stands for Average Cost Basis. Simply put, ACB is the average price you have paid for a specific stock, including any brokerage fees (commissions).
ACB is used, among other things, when calculating capital gains/losses for tax reporting purposes.
đź’ˇ Sales do not affect your ACB
Calculator to determine your ACB
- Select how many purchase occasions you want to include.
- Choose whether you want to include brokerage fees.
- Enter the number of shares purchased at each occasion and the price per share.
Average Purchase Price (GAV) - calculator
This is your average purchase price per share
Number of shares must be greater than 0
How to calculate your ACB
ACB = Total invested capital / Number of shares
- Calculate the total amount spent on each purchase by multiplying the number of shares by the purchase price.
- Sum the totals from all purchase occasions to find the total amount invested.
- Divide the total amount by the total number of shares purchased.
Example:
In this example, a total of 35 shares are purchased for a total of $3,900.
3900 / 35 = 111.42
ACB = $111.42/share
| Purchase Occasion | Quantity | Price/share | Total Purchase Price |
| 1 | 10 units | $120 | $1,200 |
| 2 | 20 units | $110 | $2,200 |
| 3 | 5 units | $100 | $500 |
| Total | 35 units | $3,900 |
Example 2:
In this example, we show how the ACB is affected each time shares are purchased. Total acquisition value is the sum paid for the shares. Total shares is the current holding, and ACB is the average acquisition value.
| Date | Event | Tot. Acquisition Value | Tot. Quantity | Tot. ACB (SEK per share) |
|---|---|---|---|---|
| 25/3 | Buy, 10 shares, $120/ea (+$1,200 & 10 shares) | $1,200 | 10 | $120 |
| 5/4 | Buy, 20 shares, $110/ea (+$2,200 & 20 shares) | $3,400 | 30 | $113.33 |
| 6/5 | Buy, 5 shares, $100/ea (+$500 & 5 shares) | $3,900 | 35 | $111.42 |
Calculation:
$1,200 + $2,200 + $500 = $3,900
$3,900 / 35 shares = $111.42 per share in ACB
What happens when selling?
When selling, profit/loss is calculated based on the relationship between the sale proceeds and the ACB. Using the example above, if you sell 10 shares for $130/each, it results in a profit. The sale amount is $1,300 and the acquisition value for the sold shares is (10*$111.42) $1,114.20.
Sale proceeds – ACB = Profit/Loss
$1,300 – $1,114.20 = $185.80 taxable profit
Capital gains tax rates in the U.S. depend on your income level and how long you held the asset (short-term vs. long-term capital gains). Please consult a tax professional regarding your specific tax obligations.
In this situation, the ACB remains at the same level for the remaining holdings. It is only affected by new purchases, never by sales.
Why does it need to be calculated?
In the U.S., capital gains are taxed, and capital losses may be deductible. These are reported in your annual tax return. ACB is used to ensure correct figures are reported to the IRS.
ACB can also be used for personal interest from an investor’s perspective. If a specific stock has been bought on several occasions, the ACB indicates the average value, which shows at what price point a sale would result in a profit.
Get help calculating ACB
There are several online services that automatically calculate ACB. Most people use the tax documents (such as Form 1099-B) provided by their broker, but for investments outside of exchange-traded securities, other services may be needed.
Our calculator above can help you calculate if you do not have too many transactions to account for.
For crypto trading
Trading cryptocurrencies creates a complex calculation of ACB. The reason is that trading often occurs in pairs, i.e., swapping between two currencies, instead of directly against a fiat currency. There are both Swedish and international services for calculating ACB and providing the basis for tax reporting.
Koinly is one of the more well-known services.
If you do not know the acquisition value (e.g., inheritance)
In the case of an inheritance, the heirs take over the shares and thus their acquisition value. However, this assumes the acquisition value is documented, which is not always the case.
Estimation based on documentation
If the acquisition value cannot be found, an estimation can be made based on this value. However, there must be good grounds for the estimation method used.
Perhaps you know the date the purchase was made? In this case, it is possible to use various services to look back in time and see the value of a specific security. When audited by the tax authorities, it is always important to be able to prove why a specific acquisition value has been used.
The Standard Method (Schablonmetoden)
If you cannot determine the acquisition value at all, the standard method can be used. The standard method means that an acquisition value is set to 20% of the sale price.
This means the standard method can also be used for investments that have yielded more than 400% in returns. In that case, it is tax-efficient to use the standard method instead of calculating traditional capital gains tax.
Other terms for ACB
Examples of other terms often used instead of ACB are:
- Average price
- Acquisition value
- Purchase cost
- Average purchase cost
- Purchase price
FrĂĄgor och svar
ACB stands for average cost basis and represents the average price you have paid for your shares. It is a central key figure for determining whether your investment has resulted in a profit or loss. Additionally, a correct ACB is required for you to be able to report your capital gains correctly to the tax authorities.
You calculate your ACB by summing the total purchase amount for all purchases and then dividing this sum by the total number of shares you own. If, for example, you have bought 10 shares for 100 SEK and another 10 shares for 120 SEK, your average cost basis becomes 110 SEK per share.
Yes, when calculating your acquisition value, you should always include the brokerage fee in the purchase price. Since the fee is a direct cost of acquiring the shares, it increases your total cost basis. This is advantageous because it can effectively reduce your future capital gains tax when you choose to sell your securities.
No, a sale does not affect your average cost basis per share for the remaining holdings. Your ACB remains at the same level for the shares you keep in the portfolio. It is only when you make new purchases in the same company that your ACB is recalculated and updated based on the new purchase price.
To obtain an updated ACB, add the cost of the new purchase to your previous total cost basis. You then divide the new total sum by the total number of shares you hold after the transaction. This gives you an average price that reflects the average cost for your entire current holding.
No, if you invest via an Investment Savings Account (ISK), you do not need to calculate ACB for tax reporting. Since you pay an annual standardized tax on the account’s value, you do not need to declare individual profits or losses. However, ACB can still be valuable for you to track your portfolio’s performance over time.
The tax authority’s standard method may be used if you lack information about what the shares originally cost. It means you can use 20 percent of the sale price as your acquisition value. The method is often financially advantageous if your shares have risen by more than 400 percent in value since the time of purchase.
When you inherit shares, you take over the deceased’s original acquisition value, which is called the continuity principle. You should therefore try to find old contract notes or tax documentation from the previous owner. If it is impossible to determine the actual purchase price, you can use the standard method upon a future sale.
The most reliable source is your contract notes, which act as receipts for your stock trades. Most online brokers save these digitally in your transaction history for many years. If the shares were held in an old account, you can contact your bank to request a historical summary of your purchases.
In a split, your existing acquisition value is divided by the new number of shares. If a company does a 2:1 split, you own twice as many shares afterward, but your ACB per share is halved. The total cost basis for the entire holding does not change, it is simply distributed over more units.
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