How do you claim the capital gains deduction?
Use Form T657, Calculation of Capital Gains Deduction to calculate the capital gains deduction. If you have investment income or investment expenses in any years from 1988 to 2023, you will also have to complete Form T936, Calculation of Cumulative Net Investment Loss (CNIL) to December 31, 2023.
Tax tip
You can claim any amount of the capital gains deduction you want to in a year, up to the maximum allowable amount you calculated.
If you are including a taxable capital gain in your income resulting from a reserve that relates to a disposition in a prior year of capital property that is qualified small business corporation shares (QSBCS) or qualified farm or fishing property (QFFP), the amount of the capital gains deducton that you may claim is based on the year in which the property was disposed. This also applies to any taxable capital gain allocated and designated to you, by a trust which had claimed a capital gains reserve on a disposition of QSBCS or QFFP in a prior year of the trust.
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