What is the capital gains deduction limit?

An eligible individual is entitled to a cumulative lifetime capital gains exemption (LCGE) on net gains realized on the disposition of qualified property. This exemption also applies to reserves from these properties brought into income in a tax year.

For 2022, if you disposed of qualified small business corporation shares (QSBCS), you may be eligible for the $913,630 LCGE. Because you only include one half of the capital gains from these properties in your taxable income, your cumulative capital gains deduction is $456,815 (1/2 of a LCGE of $913,630).

For dispositions of qualified farm or fishing property (QFFP) in 2016 to 2022, the LCGE is $1,000,000. Because you only include one half of the capital gains from these properties in your taxable income, your cumulative capital gains deduction is $500,000 (1/2 of a LCGE of $1,000,000).

The capital gains deduction limit on gains arising from dispositions of QSBCS in 2021 is $446,109 (1/2 of a LCGE of $892,218).

The capital gains deduction limit on gains arising from dispositions of QSBCS in 2020 is $441,692 (1/2 of a LCGE of $883,384).

The capital gains deduction limit on gains arising from dispositions of QSBCS in 2019 is $433,456 (1/2 of a LCGE of $866,912).

The capital gains deduction limit on gains arising from dispositions of QSBCS in 2018 is $424,126 (1/2 of a LCGE of $848,252).

The capital gains deduction limit on gains arising from dispositions of QSBCS in 2017 is $417,858 (1/2 of a LCGE of $835,716).

The capital gains deduction limit on gains arising from dispositions of QSBCS in 2016 is $412,088 (1/2 of a LCGE of $824,176).

The limit on gains arising from dispositions of QSBCS and QFFP in 2015 is $406,800 (1/2 of a LCGE of $813,600). For dispositions of QFFP after April 20, 2015, the LCGE is $1,000,000. The additional deduction is calculated as the difference between $500,000 (1/2 of a LCGE of $1,000,000) and the $406,800 limit.

The limit on gains arising from dispositions of QSBCS and QFFP in 2014 is $400,000 (1/2 of a LCGE of $800,000).

The limit on gains arising from dispositions of qualified farm property, qualified fishing property or QSBCS after March 18, 2007 and before 2014 is $375,000 (1/2 of a LCGE of $750,000).

Because the capital gains inclusion rate in 2022 is 1/2, only 50% of the capital gain from a disposition of property is taxable.

In a year, you can claim any amount of the deduction you want, up to the maximum allowable amount you calculated.

Forms and publications

• Form T657, Calculation of Capital Gains Deduction for 2022
• Form T936, Calculation of Cumulative Net Investment Loss (CNIL) to December 31, 2022

Related topics

• Line 12700 – Taxable capital gains
• Qualified farm or fishing property (QFFP)
• Qualified small business corporation shares