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 qualified farm or fishing property, qualified small business corporation shares or certain resource property.
  • You were resident in Canada throughout 2017, or you were resident in Canada at some time in 2017 and were either resident in Canada throughout 2016 or expect to be resident in Canada throughout 2018.

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, 2017, 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.

Special case

If, before January 1, 2017, you disposed of capital property that is qualified farm or fishing property, and you are reporting the resulting gain on line 23 or 24 of Schedule L, enter the gain realized on the eligible incorporeal capital amount on line 86 of Schedule G, provided you have yet to reach the capital gains deduction limit and your fiscal period ends on a date other than December 31. Do not include the recovery of annual deductions claimed for previous years. Also complete form TP-726.7-V, Capital Gains Deduction of Qualified Property.

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

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 qualified shares in a corporation as part of the transfer of a family business

If you realized a capital gain on the disposition of qualified shares after March 17, 2016, as part of the transfer of a family business, you must claim a capital gains deduction in respect of the resulting gain. To claim the deduction complete form TP-726.7-V, Capital Gains Deduction on Qualified Property.

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

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