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Home -> Filing Your Return -> Stocks, Bonds etc. -> Capital Gains and Losses -> Capital Gains ReserveCapital Gains ReserveIncome Tax Act s. 40(1)(a)(iii), 40(1.1), 40(2)(a)When you sell any type of property that results in a capital gain, it may be possible to spread the gain over a number of years. This is done by claiming a capital gains reserve. The reserve cannot be claimed in a tax year if you:
Claiming the reserve is done on your tax return, by completing and filing Form T2017, Summary or Reserves on Dispositions of Capital Property. The reserves are then deducted from Total of all gains (or losses) before reserves, on Schedule 3 of the tax return. Then the capital gains and losses inclusion rate is applied to determine the Taxable capital gain (or net capital loss) for the year. The inclusion rate for capital gains and losses changed effective June 25, 2024. Depending on the amount of the capital gain, this may affect the taxable amount of capital gains reserve that is included in income. See the article for the capital gains reserve for All other property except donated non-qualifying securities for more information on this. Categories For The Capital Gains ReserveAll other property except donated non-qualifying securities - applies to most dispositions Dispositions to your child of family farm property, family fishing property after May 1, 2006, and small business corporation shares Gifts of non-qualifying securities (other than an excepted gift) to a qualified donee TaxTips.ca ResourcesCapital Gains and Losses - for other methods of reducing or eliminating capital gainsElection to designate the amount of proceeds when capital property is donated Canada Revenue Agency (CRA) ResourcesClaiming a capital gains reserve T4037 Capital Gains - Claiming a Reserve IT-288R2 (Archived) Gifts of Capital Property to a Charity and Others Form T2017, Summary or Reserves on Dispositions of Capital Property Tax Tip: The capital gains reserve is a good tool for deferral of capital gains. See your tax professional, and do some advance planning! Revised: September 20, 2024
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