Capital gains and losses

Capital gains and losses

CapitalProp

Use CapitalProp to select the relevant type of capital property.

The following options are applicable for the keyword CapitalProp.

Types of property classified on schedule 1 and on which capital gains (losses) can be realized.

Qualified small business corporation shares
In the year of disposal, DT Max will classify the gain or loss as a qualified small business corporation gain or loss. Otherwise, DT Max will classify the gain or loss as a non-qualified small business corporation gain or loss.
Qualified farm property
Choose this option if you are reporting a capital gain or loss from a disposition of qualified farm property.
Qualified fishing property
Mutual fund units and other shares
Bonds and other properties
Choose this option if the trust disposed of bonds, debentures, promissory notes, options, and/or other like properties.
Real estate and depreciable property
Choose this option if the trust sold real estate or depreciable property. A trust cannot have a capital loss on the disposition of depreciable property.
Personal use property
Personal use property losses are not deductible. The minimum proceeds and adjusted cost base for such property upon disposal is $1,000.
Listed personal property
Listed personal property losses are only deductible against listed personal property gains.
Allowable business investment loss
Total allowable business investment losses. DT Max will deduct the deductible loss in the current tax year, on line 25 of the federal income tax return and line 69 of the Quebec return. If the amount is reduced, verify the reduction on the schedule of ABIL and Reduction of BIL. If you have inadvertently entered a gain as an allowable business investment gain, DT Max will prompt you to correct your entry.
If the taxpayer could not use all of the ABIL due to insufficient income, DT Max will carry forward the unused amount into next year's database as Loss-CF. If, on the other hand, the taxpayer was unable to use the full amount because of the restrictions of the reduction in ABIL calculations, this unused amount will also be carried forward as Loss-CF.
Information slips
Eligible capital property - farming
This represents the taxable capital gains from eligible capital property.

Type.cg

Choose the type of capital property.

The following options are applicable for the keyword Type.cg.

Land
Building
Ecological property
Other depreciable property
Other capital gains
QSBCS
Qualified farm property
Qualified fishing property
Partnerships - your share of capital gains
Other

IssuerName

Use the keyword IssuerName to enter the name of the issuer of the investment.

#Shares

Use the keyword #SHARES to enter the number of units or shares that were disposed of.

Address-Prop

Use the keyword Address-Prop to enter the address or legal description of the capital property.

Jurisdiction.cg

If your client is a non-resident, use the keyword Jurisdiction.cg to indicate in which province or territory he disposed of the capital property.

This information is only required for non-residents.

If the disposition of capital property occurred in Quebec, the taxpayer is subject to provincial tax on the capital gain and is deemed a resident of Quebec entitled to a remission order.

If the disposition of capital property occurred elsewhere in Canada, the client is subject to the federal surtax of 48% on the capital gain.

The following options are applicable for the keyword Jurisdiction.cg.

Newfoundland and Labrador
Prince Edward Island
Nova Scotia
New Brunswick
Quebec
Ontario
Manitoba
Saskatchewan
Alberta
British Columbia
Yukon
Northwest Territories
Nunavut

Face-Value

Use the keyword Face-Value to enter the face value of the bond or other like property.

Be sure to enter this information as soon as it is available. DT Max will store it and make it accessible to you upon disposition of the capital asset. Enter this information as soon as you get it so that it will be available upon disposition of the capital asset.

MaturityDate

Use the keyword MaturityDate to enter the date of maturity of the bond or other like property.

Be sure to enter this information as soon as it is available. DT Max will store it and make it accessible to you upon disposition of the capital asset, when you require it for next year's return, or for purposes of financial planning.

Description

Use the keyword Description to provide a brief description of the source of the capital gain or loss.

It will appear on schedule 1 and schedule A.

Deemed-Disp

Use the keyword Deemed-Disp to enter the reason for the deemed disposition and the date the disposition occurred.

On specified dates during the life or existence of a trust, the trust is deemed to have disposed of its capital property. The resulting gains or losses must be reported on the trust's return in the taxation year in which the dispositions are considered to have occurred.

DT Max will calculate the income on federal form T1055 and, if applicable, on Quebec schedule TP-653.

If the trust actually disposes of the property before the end of the taxation year, do not enter this keyword in the group.

The following options are applicable for the keyword Deemed-Disp.

Death of beneficiary spouse
21-year rule
Migration
Specified immovable (Quebec)

Date-Acqu

Use the keyword Date-Acqu to enter the date of acquisition of the capital property sold.

This pertains to all capital gains or losses except for those reported on information slips.

Be sure to enter this information without delay. DT Max will store it and make it accessible to you upon disposition of the capital asset.

Date-Disp

Use the keyword Date-Disp to enter the date of disposition of the capital property sold.

This pertains to all capital gains or losses except for those reported on information slips.

Proceeds.cg

Use the keyword Proceeds.cg to enter the amount received or to be received in payment for the capital property disposed of. In most cases, it refers to the sale price of the property. Use [Alt-J] to enter different values for other jurisdictions.

ACB.cg

Use ACB.cg to enter the ACB (adjusted cost base) of a capital property disposition. This is usually the cost of the property.

The ACB can differ from the original cost if changes have been made to the property between the time it was acquired and the time it was sold.

If the trust received a T3 slip with an amount showing in box 42, it should use this amount to determine the ACB for the interest in that trust. The ACB should be reduced if there is a positive amount in box 42 of the T3 slip. A negative amount in box 42 will result in an increase in the ACB. Use [Alt-J] to enter different values for other jurisdictions.

Expenses.cg

Use the keyword Expenses.cg to enter the expenses incurred with respect to the disposition of capital property.

The following options are applicable for the keyword Expenses.cg.

Expenses relating to the disposition

Use [Alt-J] to enter different values for other jurisdictions.

PrincipalRes.cg

Use the keyword PrincipalRes.cg to designate the property as a principal residence and to complete form T1079 titled Designation of a property as a principal residence by a personal trust.

A principal residence can be any of the following types of housing units:

a house;
a cottage;
a condominium;
an apartment in an apartment building;
an apartment in a duplex; or
a trailer, mobile home, or houseboat.

When the housing unit is sold or is considered to have been sold, the sale does not normally have to be reported on the tax return and no tax has to be paid on any gain from the sale. This is the case if the housing unit was the principal residence for every year owned.

If the housing unit was not the principal residence for all the years that the taxpayer owned it, the capital gain, or part of the capital gain on the property that relates to the years for which the property was not designated as the principal residence must be reported.

Note Because the housing unit is considered personal-use property, the loss cannot be claimed.

Note For years after 1981, only one housing unit per family can be designated as a principal residence.

Street.res

Use the keyword Street.res to enter the street where the principal residence is located.

City.res

Use the keyword City.res to enter the city where the principal residence is located.

Province.res

Use the keyword Province.res to enter the province where the principal residence is located.

The following options are applicable for the keyword Province.res.

Newfoundland and Labrador
Prince Edward Island
Nova Scotia
New Brunswick
Quebec
Ontario
Manitoba
Saskatchewan
Alberta
British Columbia
Yukon
Northwest Territories
Nunavut

PostCode.res

Use the keyword PostCode.res to enter the postal code of the principal residence.

Designation.res

Use the keyword Designation.res to specify the taxation years during which the property was designated as principal residence on form T1079 titled Designation of a property as a principal residence by a personal trust.

The following options are applicable for the keyword Designation.res.

Period after 1971 and before 1982
Period after 1981 to current year

Years.res1

Use the keyword Years.res1 to enter the period of taxation years during which the residence is designated as the principal residence.

The following options are applicable for the keyword Years.res1.

From
To

Years.res2

Use the keyword Years.res2 to enter the period of taxation years during which the residence is designated as the principal residence.

The following options are applicable for the keyword Years.res2.

From
To

Property-1981.c

Use the keyword Property-1981.c to enter the information needed to calculate the capital gain on form T1079 titled Designation of a property as a principal residence by a personal trust when the property was owned on December 31, 1981.

The following options are applicable for the keyword Property-1981.c.

Adjusted cost base on December 31, 1981
Fair market value on December 31, 1981
Capital expenditures made after 1981

Use [Alt-J] to enter different values for other jurisdictions.

Election-1994.c

Use the keyword Election-1994.c to enter the information needed to calculate the reduction of the capital gain on form T1079-WS Principal residence worksheet when form T664 or T664 (Seniors) titled Election to report a capital gain on property owned at the end of February 22, 1994 has been completed for the property.

The following options are applicable for the keyword Election-1994.c.

Designated proceeds of disposition for the 1994 election
Adjusted cost base on February 22, 1994
Fair market value on February 22, 1994
Adjustment to cost base after 1981 and before 23/02/94
Capital gain deemed to have been realized on 22/02/94

Use [Alt-J] to enter different values for other jurisdictions.

#Months

Use the keyword #MONTHS to enter the number of months in each period where the trust owned the property excluding the months the trust had designated the property as a principal residence.

This information is needed to calculate the reduction of the capital gain on form T1079-WS titled Principal residence worksheet.

The following options are applicable for the keyword #Months.

Period after February 1992 and before March 1994
Period after 1971 and before March 1994

Use [Alt-J] to enter different values for other jurisdictions.

Change-In-Use.c

Change-In-Use.c change in use of property and election under section 284 or 286.1 [TP-274]

YearsChange.res

Use the keyword YearsChange.res to enter the period of taxation years for the following situations:

The taxpayer began to use the principal residence to earn income, and is making or has made an election under section 284 of the Taxation Act, whereby he/she is deemed not to have changed the use of the property in question;
The taxpayer began to use as the principal residence a property previously used to earn income, and he/she has made an election under section 286.1 of the Taxation Act, whereby they are deemed not to have disposed of the property at the time of the change in its use.

The following options are applicable for the keyword YearsChange.res.

From
To

Reserves.cg

Use the keyword Reserves.cg for all capital gains or losses where reserves can be taken.

Use Reserves.cg to enter the amount of the capital gains reserve for the current year in respect to that particular capital disposition. Use [Alt-J] to enter different values for other jurisdictions.

Gain-Tslip

If your client has elected to report a capital gain on a mutual fund or other flow-through entity, enter the ineligible gain recorded on the T-slip with the keyword Gain-Tslip.

This will enable the application of the capital gain reduction against the T-slip gain.

Gift.cg

Use the keywprd Gift.cg to specify whether this is a taxable capital gain resulting from a gift of capital property made in the year.

DT Max will report this capital gain on line 1 of the federal return and on line 53 of the Quebec return.

Note that in order for DT Max to handle this asset as a gift, you must also enter an amount with the keyword Donations.

The following options are applicable for the keyword Gift.cg.

Increased limit for donations (25%)
Inclusion rate reduced by half (Sched 1A)
Not a gift

Eligible-Gift.cg

Use the keyword Eligible-Gift.cg to enter the amount by which the fair market value of the gifted property exceeds the amount of an advantage, if any, received for the gift.

The advantage is generally the total of all property, services, compensation, or other benefits received as partial payment for, or in gratitude for, the gift.

DT Max will use this amount to calculate the gain subject to the 25% inclusion rate. This amount will appear in column 6 of Schedule 1A. If no amount is entered with this keyword, DT Max will assume the eligile amount to be equal to the proceeds. Use [Alt-J] to enter different values for other jurisdictions.

Amount.cgs

Use the keyword Amount.cgs to enter the total amount of capital gains from the T4 slip.

This is the total capital gain, which reflects 100% of the gain.

DT Max will calculate the taxable amount. Use [Alt-J] to enter different values for other jurisdictions.

Ins-FundLoss

Use the keyword Ins-FundLoss to enter the amount of insurance segregated fund capital losses as indicated in box 37 of the T3 slip.

This represents the designated portion of allowable capital losses from insurance segregated fund trusts. Use [Alt-J] to enter different values for other jurisdictions.

Country.fi

Use the keyword Country.fi to select the country of origin of the foreign income.

Exchange.fi

Use the keyword Exchange.fi to enter the exchange rate at which income is to be converted to Canadian dollars. If you entered the amount in Canadian dollars, no entry is required here.

Click here for the CRA's records of average exchange rates.

Tax-Paid.fi

Use the keyword Tax-Paid.fi to enter the total amount of foreign tax paid. When the foreign taxes paid are entered, DT Max will calculate the following tax credits:

federal foreign tax credits (T2209) - one per country
provincial foreign tax credit (T2036)
Quebec foreign tax credit for foreign non business income (TP-772)

In order for the calculations to be completed properly, you must enter the type of foreign income in Foreign-Inc, and the country of reference in Country.fi.

The foreign tax credits determined on form T2209, T2036 and TP-772 are calculated on a country-by-country basis. You can override the federal non business foreign tax credit with the keyword Foreign-Cr-OV. This override will be carried through to the provincial foreign tax credit calculation (T2036 or TP-772 for Quebec).

Tax-Treaty.fi

Use the keyword Tax-Treaty.fi to enter amounts to be deducted from net income for tax purposes due to a tax treaty with Canada.

The total treaty-exempt income will be deducted from net income for tax purposes on the tax returns filed.

CapProp-OV

Use the keyword CapProp-OV to override the amount of gain/loss on the disposition of capital property. Use [Alt-J] to enter different values for other jurisdictions.

Cap-Reserves

Use Cap-Reserves to enter the type of capital gain reserves available this year for purposes of schedule 2.

DT Max will automatically bring into income any capital gains reserves created in respect of capital dispositions of prior years. Should you wish to retain these in the capital gains reserve accounts, or should you enter data for this client for the first time using DT Max, use Cap-Reserves.

If you used DT Max for this client last year, the comparative data on the right-hand side of the screen will assist you in entering this information.

The following options are applicable for the keyword Cap-Reserves.

Types of property classified on schedule 1 and on which capital gains (losses) can be realized.

Qualified small business corporation shares
In the year of disposal, DT Max will classify the gain or loss as a qualified small business corporation gain or loss. Otherwise, DT Max will classify the gain or loss as a non-qualified small business corporation gain or loss.
QSBCS (after 18/03/07)
Qualified farm property
Choose this option if you are reporting a capital gain or loss from a disposition of qualified farm property.
Qualified farm property (after 18/03/07)
Qualified fishing property
Qualified fishing property (after 18/03/07)
Other capital property
Capital property before November 13, 1981

At-Opening

Use the keyword At-Opening to enter the amount you wish to keep in the capital gains reserves account at the opening of the current taxation year for the dispositions in the year being processed.

This field will be updated automatically by DT Max for the following year. See Cap-Reserves. Use [Alt-J] to enter different values for other jurisdictions.

In-Income

This is the amount to be taken into income in the current taxation year in respect of the capital gains account for the dispositions in the year just entered.

DT Max gives you the flexibility to enter this amount or the At-YearEnd amount. If both are entered, DT Max will check for consistency but will accept the At-YearEnd entry. See Cap-Reserves. Use [Alt-J] to enter different values for other jurisdictions.

At-YearEnd

Use the keyword At-YearEnd to enter the amount that you wish to keep in the capital gains reserves account at the end of the current taxation year for the dispositions in the year being processed. See Cap-Reserves. Use [Alt-J] to enter different values for other jurisdictions.

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