Calculating your capital gain or loss

To calculate your capital gain or loss, you need to know the following 3 amounts:

  • the proceeds of disposition
  • the adjusted cost base (ACB)
  • the outlays and expenses incurred to sell your property

To calculate your capital gain or loss, subtract the total of your property's ACB, and any outlays and expenses incurred to sell your property, from the proceeds of disposition.

Note

When calculating the capital gain or loss on the sale of capital property that was made in a foreign currency:

  • convert the proceeds of disposition to Canadian dollars using the Exchange Rates or Annual Average Exchange Rates (1997 to 2017) in effect at the time of the sale
  • convert the adjusted cost base of the property to Canadian dollars using the exchange rate in effect at the time the property was acquired
  • convert the outlays and expenses to Canadian dollars using the exchange rate in effect at the time they were incurred

You have a capital gain when you sell, or are considered to have sold, a capital property for more than the total of its ACB and the outlays and expenses incurred to sell the property. See this example.

When you sell, or are considered to have sold, a capital property for less than its ACB plus the outlays and expenses incurred to sell the property, you have a capital loss. You can apply 1/2 of your capital losses against any taxable capital gains in the year. For more information see Losses and deductions.

You may be entitled to an inclusion rate of zero on any capital gain resulting from the donation of any of the following properties to a qualified donee: 

  • a share of capital stock of a mutual fund corporation
  • a unit of mutual fund trust
  • an interest in a related segregated fund trust
  • a prescribed debt obligation this is not a linked note
  • ecologically sensitive land including a covenant, an easement, or in the case of land in Quebec, a personal servitude (when certain conditions are met), or a real servitude donated to certain qualified donees other than a private foundation
  • a share, debt obligation, or right listed on a designated stock exchange.
For donations of publicily traded securities, the inclusion rate of zero also applies to any capital gain realized on the exchange of shared of the capital stock of a corporation for those publicly listed securities donated. This treatment is subject to certain conditions. In cases where the exchanged securities are partnership interestes a special calculation is required to determine the capital gain to be reported. For more information on exchangeable securities, see Pamphlet P113, Gifts and Income Tax.
 
Generally, if you donate property to a qualified donne that is, at the time of the donation, included in a flow-through share class of property, in addition to any capital gain that would otherwise be subject to the zero inclusion rate, you may be deemed to have a capital gain from the disposition of another captial property. For more information including the calculation of the capital gain, see Pamphlet P113, Gifts and Income Tax.
 
If you donated any of these properties, use Form T1170, Capital Gains on Gifts of Certain Capital Property, to calculated the capital gain to report on Schedule 3.
 
Even though, in most cases, the inclusion rate of 1/2 is reduced to zero for gifts of these properties, Form T1170 should still be completed to report these gifts.
 
However, in all cases, if you received an advantage in respect of the gift, part of the captail gain on the gifted property will be subject to the 1/2 inclusion rate. In addition, the inclusion rate of zero does not apply to capital losses you may have from such donations. For more information, see Capital Gains realized on gifts of certain capital property.

 

Note

Before 1972, capital gains were not taxed. Therefore, if you sold capital property in 2019 that you owned before 1972, you have to apply special rules when you calculate your capital gain or loss to remove any capital gains accrued before 1972. To calculate your gain or loss from selling property you owned before 1972, use Form T1105, Supplementary Schedule for Dispositions of Capital Property Acquired Before 1972.

Completing your tax return

Use Schedule 3, Capital gains (or losses), to calculate and report all your capital gains and losses. Do not include any capital gains or losses in your business or property income, even if you used the property for your business. For more information see Completing Schedule 3.

If you donated certain properties to a qualified donee, you will also have to complete Form T1170, Capital gains on gifts of certain capital property.

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