In your Account History you may see a transaction listed as “ARC” or “ROC COST ADJ” (Return of Capital Adjustment). These transactions show the adjustment made to your book cost for the security shown so that it reflects Return of Capital “ROC” from the prior calendar year received by the trust unit issuer. This is a non-taxable event that reduces the book cost for your security.
To make tax filing easier for clients, ROC amounts will be reflected in the Adjusted Cost Base “ACB”, also known as book cost, of the holding on our book of record. This is done by posting an ARC or ROC transaction, which will adjust the ACB for each trust unit, income trust, or exchange traded fund’s applicable distribution from the previous tax year.
The adjustment is based on information received from trust issuers too late to include on the Trading Disposition Summary. The reason it is posted after tax documents are produced is because information from the issuer is not available until they have reported the tax breakdown of trust distributions after their fiscal year end audit. Annual ROC adjustments are always processed in May or June for the prior tax year.
You may wish to seek advice from a tax professional on how the ROC amounts affect your gain/loss calculations.
Due to a system limitation, Account History will not show the cost adjustment value. We can provide that to you over the phone or by email. We will work to get this available as we enhance our site.
For examples of how Return of Capital works and how it affects the Adjusted Cost Basis of your holdings, please see this explanation from Investopedia.com