Which gains are eligible?
The capital gains deduction can be applied against taxable capital gains included in 2017 income that arose from:
- dispositions of qualified small business corporation shares;
- dispositions of qualified farm or fishing property; and
- reserves brought into income in 2017, from any of the above.
The capital gains deduction cannot be applied to taxable capital gains arising from dispositions of publicly traded shares and mutual funds, and other gains that are reported in sections 3 to 8 of Schedule 3.
If you disposed the above properties while you were a non-resident of Canada, the capital gains are not eligible for the capital gains deduction. For more information on what constitutes a resident of Canada, see Who is eligible to claim the capital gains deduction.
Deferred capital gains on the disposition of qualified small business corporation shares do not qualify for the capital gains deduction.
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