139 – Taxable capital gains

If you disposed of capital property (for example, if you sold or transferred shares, bonds, debts, land or buildings), you may have to include a portion of the gain realized in your income. If your gains are greater than your losses, 50% of the excess must be entered on line 139 as a taxable capital gain (This link will open a new window).

However, if your losses are greater than your gains, 50% of the excess constitutes a net capital loss. You cannot enter a loss on line 139, but you can use a loss to reduce your taxable capital gains for other years. For more information, see Net capital loss below.

Your capital gains or losses on the disposition of publicly traded securities can be calculated using the information on your RL-18 slip (or your T5008 slip if you did not receive an RL-18 slip) or on the statement of account or transaction record received from a stockbroker or an institution.

You must file a 2016 income tax return if you disposed of capital property or realized a capital gain (for example, if a trust allocated a capital gain to you) in 2016, or if you are required to report a capital gain with regard to a 2015 reserve.

If you fail to report a capital gain (This link will open a new window) realized on the disposition (This link will open a new window) of qualified farm or fishing property, qualified small business corporation shares or certain resource property, you may lose your entitlement to the capital gains deduction (line 292). The same is true if you file your 2016 income tax return after April 30, 2018 (or after June 15, 2018, if you or your spouse is reporting business income for 2016).

To calculate your capital gains or losses on the disposition of capital property, complete Part A of Schedule G. If you disposed of resource property, complete Part B. If you disposed of qualified farm or fishing property, or qualified small business corporation shares, complete Part C. The capital gains you enter in Part B or Part C of Schedule G may entitle you to a capital gains deduction. For more information, see the instructions for line 292.

Reserve for a capital gain

If you disposed of capital property and part of the proceeds of disposition may be paid after the end of the year, you can, as a rule, deduct a reserve for this amount. However, the amount you can deduct as a reserve depends on the amount you deduct as a reserve in your federal income tax return.

Important

If you deduct a reserve in your 2016 return, you must include the amount of the reserve in your income for 2017. However, you may be able to deduct another reserve in your 2017 return.

For more information, consult the guide entitled Capital Gains and Losses (IN-120-V).

Financial assistance received as a result of a disaster

If you received financial assistance as a result of a disaster, consult the guide The Tax Effects of Financial Assistance Received as a Result of a Disaster (IN-125-V).

Disposition of a principal residence

If you disposed of your principal residence in 2016, you must complete form TP-274-V, Designation of Property as a Principal Residence. You will thereby avoid having all or part of any profit considered a capital gain.

Disposition of personal-use property (line 16 of Schedule G)

If you realized a capital gain (This link will open a new window) on the disposition (This link will open a new window) of personal-use property, you are required to report it only if the proceeds of disposition (This link will open a new window) are more than $1,000. In this case, you must enter an adjusted cost base of $1,000 or the actual adjusted cost base (This link will open a new window), whichever is greater.

A loss sustained on the disposition of personal-use property cannot be deducted.

Disposition of precious property (lines 18 and 19 of Schedule G)

If you realized a capital gain (This link will open a new window) on the disposition (This link will open a new window) of precious property, you are required to report it only if the proceeds of disposition (This link will open a new window) are more than $1,000. In this case, you must enter an adjusted cost base of $1,000 or the actual adjusted cost base (This link will open a new window), whichever is greater.

If you disposed of precious property in 2016 and your gains were greater than your losses, you can deduct the net losses you sustained from 2009 to 2015 on precious property, provided you have not previously deducted them. The amount you deduct must not be greater than the net gain you realized in 2016 on the disposition of precious property.

If you disposed of precious property in 2016 and your losses were greater than your gains, you cannot deduct these losses from the gains you realized on the disposition of other types of property. However, you can deduct them from the gains you reported on the disposition of precious property in the previous three years. To do so, complete form TP-1012.A-V, Carry-Back of a Loss, and file it separately from your return.

Deferral of capital gains realized on a disposition of small business corporation shares (line 94 of Schedule G)

If you realized a capital gain (This link will open a new window) on the disposition (This link will open a new window) of small business corporation shares (private corporation shares), and you acquired other small business corporation shares (replacement shares), you can, under certain conditions, defer taxation of all or part of the gain until the new shares are disposed of.

For more information, consult the guide entitled Capital Gains and Losses (IN-120-V).

Net capital loss

If the result obtained on line 98 of Schedule G is negative (that is, if your allowable capital losses are greater than your taxable capital gains), this amount constitutes a net capital loss. You cannot deduct this net capital loss in 2016. Be sure to enclose Schedule G with your return so we can update your file. You can use your loss to reduce your taxable capital gains for the three previous years or for future years. If you wish to use a loss to reduce your taxable capital gains for previous years, complete form TP-1012.A-V, Carry-Back of a Loss, and file it separately from your return. The rules under which you can reduce your taxable capital gains for future years are explained in the instructions for line 290.

For more information about capital gains and losses, consult the guide entitled Capital Gains and Losses (IN-120-V).

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