Lines 413 and 414 – Labour-sponsored funds tax credit

You may be able to claim a credit if you became the first registered holder to acquire, or irrevocably subscribe to and pay for, an approved share of the capital stock of a prescribed labour-sponsored venture capital corporation (LSVCC) from January 1, 2016, to March 1, 2017.

If you became the first registered holder of an approved share from January 1, 2016, to February 29, 2016, and did not claim the whole credit for it on your 2015 tax return, you can claim the unused part on your 2016 tax return.

If you became the first registered holder of an approved share from January 1, 2017, to March 1, 2017, you can claim any part of the credit for that share on your tax return for 2016, and the unused part on your tax return for 2017.

Notes

If the first registered holder of the share is an RRSP for a spouse or common-law partner, the RRSP contributor or the annuitant (recipient) can claim this credit for that share.

The LSVCC tax credit for a solely federally-registered LSVCC will remain at 5% for the 2016 taxation year and eliminated thereafter.

If you bought shares after 2003 of a provincial or territorial registered LSVCC (that is not a federally registered LSVCC), you can only claim the federal-sponsored funds tax credit in respect of those shares if a provincial or territorial income tax credit is also available to be claimed for them.

RRSPs and the Labour-sponsored funds tax credit

See the Example – RRSPs and the Labour-sponsored funds tax credit.

Completing your tax return

Enter your net cost of your contributions to a labour-sponsored venture on line 413 of Schedule 1. Net cost is the amount you paid for shares, minus any government assistance (other than federal provincial tax credits) on the shares.

Claim the amount of the credit on line 414 of Schedule 1. For 2016, the allowable credit cannot be more than 15% of the net cost of the original acquisition of shares of a prescribed provincially-registered LSVCC (net provincial acquisition), to a maximum of $750 per year. The allowable credit cannot be more than 5% of the net cost of the original acquisition of shares of a solely federally-registered LSVCC, to a maximum of $250 per year.

Your province or territory may offer a similar tax credit. Be sure to complete the tax and credit form for your province or territory of residence.

If you were a resident of Quebec on December 31, 2016, see the guide for your provincial tax return for Quebec.

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