292 – Capital gains deduction

If you are reporting a taxable capital gain on line 139, you may be entitled to a capital gains deduction, provided you meet both of the following conditions:

  • You realized the gain when you disposed of (sold, transferred, gave, bequeathed, etc.) qualified farm or fishing property, qualified small business corporation shares or certain resource property.
  • You were resident in Canada throughout 2018, or you were resident in Canada at some time in 2018 and were either resident in Canada throughout 2017 or expect to be resident in Canada throughout 2019.

To calculate your deduction, complete form TP-726.7-V, Capital Gains Deduction on Qualified Property.

Your cumulative net investment loss (CNIL) on December 31, 2018, may reduce your capital gains deduction. Your CNIL is equal to the investment expenses you incurred after 1987, minus the investment income you earned after 1987. To calculate your CNIL, complete form TP-726.6-V, Cumulative Net Investment Loss.

Disposition of certain resource property

If you realized a capital gain when you disposed of certain resource property acquired after May 14, 1992 (for example, a flow-through share, or an interest in a partnership that invested in flow-through shares or incurred resource expenses after May 14, 1992), you may be entitled to a capital gains deduction. To find out if you can claim a deduction and to calculate the amount you can deduct, complete form TP-726.20.2-V, Capital Gains Deduction on Resource Property.

Disposition of eligible shares in a corporation as part of the transfer of a family business

If you realized a capital gain on the disposition of eligible shares, as part of the transfer of a family business, and designated an amount as a deemed capital gain using form TP-517.5.5-V, Designating a Deemed Capital Gain Further to the Transfer of a Family Business, you must claim a capital gains deduction in respect of the deemed capital gain. To claim the deduction, complete form TP-726.7-V, Capital Gains Deduction on Qualified Property.

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

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