Reserves on dispositions of capital propertyYou have made a capital gain and you are claiming a reserve on the capital gain. We recommend that you read the chapter, "Claiming a reserve" in Guide T4037 Capital gains.
To know the rules for this reserve, you may visit the following link:
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4037.html
Also review Form T2017 Summary of Reserves on Dispositions of Capital Property, which you can find at the following link:
https://www.canada.ca/en/revenue-agency/services/forms-publications/forms/t2017.html
For Quebec residents, please visit the following link
https://www.revenuquebec.ca/en/online-services/forms-and-publications/current-details/in-120-v/
Please read Part 5 of the guide IN-120.
When you sell an asset, you must declare it in your tax return and to do this, follow these steps:
1 - On the "Left side menu on the Interview tab", select the "Interview setup";
2 - On the screen on your right, go to the "Investment income and expenses" group, check the box »Capital gains (or losses) and capital gain history" and click "Next" at the bottom of the page;
3 - Go back to the "Left side menu on the Interview tab" and select the "Capital Gains (or losses) & ABIL" and the screen on your right choose your option;
4 - In this case, you can choose "Real estate, depreciable property, and other properties" then enter the relevant information and on the line "Reserve on disposition" enter the amount of the reserve which may not exceed 80%.
Refer to Schedule 3 of the Tax Return. See line 19700 total capital gains and the reserves on line 19200. The program will generate Form T 2017 Summary of Reserves on Dispositions of Capital.
For Quebec residents, the program will generate Schedule G and the amount of the reserve will be entered on line 32 while the capital gain will be on line 44.
If you use the software the following year, the reserves on dispositions will be carried forward to the following year.
If you need help, you can contact the CRA at the following telephone number 1-800-959-8281.
ID: 20191217163234IB.xml
Webpage: KPA330-20191217163234IB.htm