Publicly traded shares, mutual fund units, deferral of eligible small business shares, and other shares

Use this section to report a capital gain or loss when you sell shares or securities that are not described in any other section of Schedule 3. These include:

  • publicly traded shares
  • units in a mutual fund trust
  • shares that qualify as Canadian securities or prescribed securities, if they are not qualified small business corporation shares or qualified family farm or fishing corporation shares
  • shares issued by foreign corporations

Report your gains or losses in Canadian dollars. Use the exchange rate that was in effect on the day of the transaction or, if there were transactions at various times throughout the year, you can use the Exchange Rates or Annual Average Exchange Rates (1997 to 2017). For information on the sale of mutual fund units or shares, see Tax treatment of mutual funds.

For information on the deferral of capital gains incurred on the disposition of small business investments, see Capital gains deferral for investment in small business.

You may get an option to buy securities through your employer. These securities may be shares of a corporation or units of a mutual fund trust. For more information, see Employee security options.

You should also use this section if you donate any of the following properties:

  • shares listed on a designated stock exchange
  • shares of the capital stock of a mutual fund corporation
  • units in a mutual fund trust
  • interest in a related segregated fund trust

If you donated any of these properties to a qualified donee, use Form T1170, Capital Gains on Gifts of Certain Capital Property, to calculate the capital gain to report on Schedule 3. For more information, see pamphlet P113, Gifts and Income Tax.

If you sold any of the items listed above in 2018, you will receive either a T5008 slip, Statement of Securities Transactions, or an account statement.

You may buy and sell the same type of property (for example, units of a mutual fund trust or publicly traded shares) over a period of time. If so, you have to calculate the average cost of each property in the group at the time of each purchase to determine the adjusted cost base (ACB). For more information, see Identical properties.

The T3 - Statement of Trust Income Allocations and Designations slip, includes Box 42 - Amount resulting in cost base adjustment. The amount in box 42 represents a change in the capital balance of the mutual fund trust identified on the slip. If you have an amount in this box, see Identical properties for further information.

If you report a capital gain from the disposition of shares or other securities for which you filed Form T664, Election to Report a Capital Gain on Property Owned at the End of February 22, 1994, see Flow-through entities.

Note

If you own shares or units of a mutual fund, you may have to report the following capital gains (or losses):

  • capital gains (or losses) you realize when you sell your shares or units of the mutual fund (report these amounts in the "Publicly traded shares, mutual fund units, deferral of eligible small business corporation shares, and other shares" section of Schedule 3)
  • capital gains realized by the fund from its investment portfolio which are then flowed out to you. For information on how to report these amounts, see Capital gains (or losses) from information slips

For 2017 and future years, if you exchange mutual fund corporation shares that result in you switching exposure between portfolios (switch funds), the exchange will be considered a disposition at fair market value (FMV) which could result in a capital gain that is taxable in the year of the exchange. This will not apply to switches between classes of shares where the only difference between the shares is based on the relative management fees or expenses paid by the investor in the classes of shares (where the switch is between different series of the same class of shares).

Completing your Schedule 3 

Report dispositions of units or shares on lines 131 and 132 of Schedule 3.

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