Capital gains realized on gifts of certain capital property

If you donated certain types of capital property to a registered charity or other qualified donee, you may not have to include in your income any amount of capital gain realized on such gifts. You may be entitled to an inclusion rate of zero on any capital gain realized on such gifts.

The inclusion rate of zero applies if you donate any of the following property:

For donations of publicly traded securities, this treatment is extended to any capital gain realized on the exchange of shares of the capital stock of a corporation for those publicly listed securities donated when they meet all of the following conditions:

In cases where the exchanged property is a partnership interest (other than prescribed interests in a partnership), the capital gain will generally be whichever of the following amounts is less:

If you donate property to a qualified donee that is, at the time of the donation, included in a flow-through share (FTS) class of property, in addition to any capital gain that would otherwise be subject to the zero inclusion rate discussed earlier, you are deemed to have a capital gain from the disposition of another capital property equal to whichever of the following amounts is less:

For more information, call the CRA at 1-800-959-8281.

If there is no advantage received in respect of the gift, the full amount of the capital gain is eligible for the inclusion rate of zero. However, if there is an advantage in respect of the gift, only a portion of the capital gain is eligible for the inclusion rate of zero. The rest is subject to an inclusion rate of 50%.

The amount subject to the inclusion rate of zero is calculated using the following formula:

A x (B ÷ C)


A = the capital gain
B = the eligible amount of the gift
C = the proceeds of disposition

Gifts of securities acquired under a security option plan

You can claim an additional deduction on line 24900 of your income tax and benefit return for donating shares of a corporation listed on a designated stock exchange or mutual fund units you acquired through your employer's security option plan. However, you must meet all of the following conditions:

The additional deduction is equal to 50% of the amount of the taxable benefit, which may effectively exempt from tax the employment benefit associated with the exercising of the stock option.

When calculating the amount of the additional deduction that can be claimed on line 24900, you determine the employment benefit by using whichever of the following two amounts is less:

You may have a capital gain on the disposition of the security. For more information, see Capital gains and losses.

Granting of options to a qualified donee

You may not claim a gift in respect of an option to acquire a property that is granted to a qualified donee until such time as the qualified donee either exercises or sells the option. At that time, the amount of the gift that you may claim is generally equal to:

Completing your Form T1170 and Schedule 3

Report all donations of these properties on Form T1170, Capital Gains on Gifts of Certain Capital Property, whether the inclusion rate is 50% or zero. Report the applicable amounts calculated on this form on line 13200 or line 15300 of Schedule 3, Capital Gains (or Losses).


The capital gain realized on an exchange of partnership interests for publicly listed securities that are then donated should not be reported on Form T1170. Instead, it should be reported directly on line 17400 of Schedule 3.

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