When do you have a capital gain or loss?

Usually, you have a capital gain or loss when you sell or are considered to have sold capital property. The following are examples of cases where you are considered to have sold capital property:

• You exchange one property for another
• You give property (other than cash) as a gift
• Shares or other securities in your name are converted
• You settle or cancel a debt owed to you
• You transfer certain property to a trust
• Your property is expropriated
• Your property is stolen
• Your property is destroyed
• An option that you hold to buy or sell property expires
• A corporation redeems or cancels shares or other securities that you hold (you will usually be considered to have received a dividend, the amount of which will be shown on a T5 slip)
• You change all or part of the property's use
• You leave Canada (see Dispositions of property for emigrants of Canada)
• The owner of the capital property dies (see What to do when someone has died)

Also, depending on your own situation, you may or may not have a capital gain (or loss) when you dispose of personal-use property or Canadian securities.

Forms and publications

• Guide T4037, Capital Gains
• Guide T4011, Preparing Returns for Deceased Persons
• Information sheet RC4169, Tax Treatment of Mutual Funds for Individuals
• Income Tax Folio S1-F3-C2, Principal Residence

Related topics

• Changes in use of your property
• Principal residence and other real estate
• Lines 12599 and 12600 – Rental income