How do you calculate and report capital gains or losses when you sell or redeem units or shares?
When you sell or redeem your mutual fund units or shares, you may have a capital gain or a capital loss. Generally, 50% (1/2) of your capital gain or capital loss becomes the taxable capital gain or allowable capital loss.
If you hold more than one class or series of a single fund, you must calculate the ACB for each class or series separately for each mutual fund that you own.
Use lines 13199 and 13200 of Schedule 3, Capital Gains (or Losses), to calculate and report all your capital gains and capital losses from your mutual fund units and shares. List the information for each mutual fund separately. Multiple redemptions from the same fund in the same year should be grouped together.
To calculate your capital gain or your capital loss, you need to know the following 3 amounts:
- the proceeds of disposition, which is the amount you received or will receive for your units or shares
- the adjusted cost base (ACB), which is the cost of your units or shares, plus any expenses you incurred to acquire them, such as commissions and legal fees and minus any returns of capital on your units or shares
- the outlays and expenses you incurred when selling your units or shares, such as redemption fees and commissions
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 and returns of capital were received
- convert the outlays and expenses to Canadian dollars using the exchange rate in effect at the time they were incurred
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