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Capital-Gains

Use Capital-Gains to enter the type of capital gain. In this way, you open the capital gains group. Enter all the information you have to generate correct calculations and to produce accurate schedules and forms relating to capital gains, losses and deductions.

The February 22, 1994 budget eliminated the $100,000 lifetime capital gain deduction for gains realized on capital property after February 22, 1994.

Usually, you have a capital gain or loss when he or she sells, or is considered to have sold capital property. The following are examples of cases where the taxpayer is considered to have sold property:

  • exchange one property for another;
  • give property (other than cash) as a gift;
  • shares or other securities are converted;
  • settle or cancel a debt;
  • transfer certain property to a trust;
  • the property is expropriated;
  • the property is stolen;
  • the property is destroyed;
  • an option hold to buy or sell property expires;
  • a corporation redeems or cancels shares or other securities (will usually be considered to have received a dividend, the amount of which will be shown on a T5 slip);
  • change all or part of the property's use;
  • leave Canada (see guide T4056, Emigrants and Income Tax); or
  • the owner dies (see guide T4011, Preparing Returns for Deceased Persons).

CAPITAL GAINS DEDUCTION
For disposition of qualified farm property or qualified small business corporation shares in 2023 or a previous year.

Note
Any capital gains realized from the disposition of qualified farm property or qualified small business corporation shares, while you were a non-resident of Canada, are not eligible for the capital gains deduction.

You have to be a resident of Canada throughout 2023 to be eligible to claim the capital gains deduction. For the purposes of this deduction, we also consider you to be a resident throughout 2023 if you were a resident of Canada for part of 2023 and throughout 2022 or 2024.

If you have investment income or investment expenses in 2023, complete Form T936, Calculation of Cumulative Net Investment Loss (CNIL) to December 31, 2023, before you complete this form. Form T936 lists what is considered to be investment income and expenses.

What is the capital gains deduction limit?
If you disposed of qualified farm property or qualified small business corporation shares, or disposed of qualified fishing property after May 1, 2006, you may be eligible for the lifetime capital gains exemption. Because you only include 1/2 of a capital gain in your income, your cumulative capital gains deduction is 1/2 of the capital gains exemption.

The total of your capital gains deductions on dispositions from 1985 to March 18, 2007, for all types of capital property, cannot be more than $250,000 (1/2 of the exemption of $500,000). Under proposed changes, the capital gains deduction limit on gains arising from dispositions after March 18, 2007, has increased by $125,000 to $375,000 (1/2 of an increased exemption of $750,000).

Qualified farm property
When you dispose of qualified farm property and have a capital gain, you can claim a capital gains deduction in 2023 that is equal to one of the following amounts, whichever is lowest:

  • your annual gains limit for 2023;
  • your cumulative gains limit for 2023
  • your net taxable capital gains in 2023, from dispositions of qualified farm property after 1984; or
  • your maximum capital gains deduction available for 2023.

Qualified small business corporation shares
When you dispose of qualified small business corporation shares and have a capital gain, you can claim a capital gains deduction in 2023 equal to one of the following amounts, whichever is lowest:

  • your annual gains limit for 2023, minus any capital gains deduction for qualified farm property claimed in 2023;
  • your cumulative gains limit for 2023, minus any capital gains deduction for qualified farm property claimed in 2023;
  • your net taxable capital gains in 2023 from dispositions of qualified small business corporation shares after June 17, 1987; or
  • your maximum capital gains deduction available for 2023.

There is an election available if you own shares of a qualifying small business corporation that stops being a small business corporation because:

  • a class of its shares is listed on a prescribed stock exchange; or
  • after 1999, a class of another corporation's shares is listed on a prescribed stock exchange.

This election will allow to report a capital gain on the return and claim the capital gains deduction, even though the shares are not actually sold. The deduction applies to any gains you have on these shares to the date the shares are listed. To make this election, complete Form T2101, Election in Respect of Gains on Shares of a Corporation Becoming Public. This form can be get from the Web site or from a tax services office.

The following options are applicable for the keyword Capital-Gains.

  • 1. Qualified small business corporation shares (QSBCS)
  • The shares of qualified small business corporations are eligible for the $971,190 super-exemption on capital gains. A loss on the sale of a small business should be entered using the option, ALLOWABLE BUSINESS INVESTMENT LOSS.

    A share of a corporation will be considered to be a qualified small business corporation share if all the following conditions are met:

    • at the time of sale, it was a share of the capital stock of a small business corporation, and it was owned by the taxpayer, the spouse or common-law partner, or a partnership of which he was a member;
    • throughout that part of the 24 months immediately before the share was disposed of, while the share was owned by the taxpayer, a partnership of which he was a member, or a person related to him, it was a share of a Canadian-controlled private corporation and more than 50% of the fair market value of the assets of the corporation were:
      • used mainly in an active business carried on primarily in Canada by the Canadian-controlled private corporation, or by a related corporation;
      • certain shares or debts of connected corporations; or
      • a combination of these two types of assets; and
    • throughout the 24 months immediately before the share was disposed of, no one owned the share other than the taxpayer, a partnership of which he was a member, or a person related to him. As a general rule, when a corporation has issued shares after June 13, 1988, either to the taxpayer, to a partnership of which he was a member, or to a person related to him, a special situation exists. It's consider that, immediately before the shares were issued, they were owned by an unrelated person. As a result, to meet the holding-period requirement, the shares cannot have been owned by any person other than the taxpayer, a partnership of which he was a member, or a person related to him a 24-month period that begins after the shares were issued and that ends when you sold them.

    However, this rule does not apply to shares issued:

    • as payment for other shares;
    • for dispositions of shares after June 17, 1987, as payment of a stock dividend; or
    • in connection with a property that the taxpayer, a partnership of which he was a member, or a person related to him disposed of to the corporation that issued the shares. The property disposed of must have consisted of either:
      • all or most (90% or more) of the assets used in an active business carried on either by you, the members of the partnership of which you were a member, or the person related to you; or
      • an interest in a partnership where all or most (90% or more) of the partnership's assets were used in an active business carried on by the members of the partnership.
  • 2. Qualified farm property (QFP)
  • The qualified farm property is eligible for the $1,000,000 super-exemption on capital gains.

    A qualified farm property is certain property the taxpayer or the spouse or common-law partner owns. It is also certain property owned by a family-farm partnership in which the taxpayer or the spouse or common-law partner holds an interest.

    A qualified farm property includes:

    • a share of the capital stock of a family-farm corporation that the taxpayer or the spouse or common-law partner owns;
    • an interest in a family-farm partnership that the taxpayer or the spouse or common-law partner owns;
    • real property, such as land and buildings; and
    • eligible capital property, such as milk and egg quotas.

    For more information on what is considered to be qualified farm property, see guide T4003, Farming Income, or guide RC4060, Farming Income and the Agristability/AgriInvest Program.

  • 2. Qualified fishing property (QFiP)
  • A qualified fishing property are reported in the "Real estate, depreciable property, and other properties" section of Schedule 3 and are eligible on Quebec only for the $1,000,000 super-exemption on capital gains.

    Qualified fishing property is the following property that is:

    • a fishing licence,
    • an individual quota or
    • a fishing boat used in a fishing business.
    In this context, the catching of shellfish, crustaceans and marine animals and the harvesting of marine plants are considered to be activities related to a fishing business. Such property must have been held and used by the fishing business for a period of at least 24 months immediately preceding the disposition.
  • 4. Stock, mutual funds & other non-depreciable property
  • Use this option to report a capital gain or loss when the taxpayer sells shares or securities that are not described in any other section of Schedule 3. These include:
    • units in a mutual fund trust;
    • publicly traded shares;
    • shares that qualify as Canadian securities or prescribed securities, if they are not qualified small business corporation shares or qualified family farm corporation shares; and
    • shares issued by foreign corporations.
  • 5. Real estate & other depreciable property
  • Real estate
    Real estate includes:
    • vacant land;
    • rental property (both land and buildings);
    • farm property, including both land and buildings (other than qualified farm property); and
    • commercial and industrial land and buildings.
    For each real property you sold in 2023 that includes land and a building, you must:
    • determine how much of the selling price relates to the land and how much is for the building; and
    • report the sale of the land and building separately on Schedule 3.

    Depreciable property
    You may have a capital gain on a disposition of a depreciable property. In addition, certain rules on capital cost allowance (CCA) may require that you add a recapture of CCA to the income or to allow a claim as a terminal loss.

    Election on dispositions of eligible capital property
    For a disposition of property from your cumulative eligible capital account, it may qualify to an election for tax years ending after February 27, 2000. The election allows qualified individuals to treat dispositions of this type of property as capital gains instead of business income. Use the "Real estate, depreciable property, and other properties" section of Schedule 3 to report the capital gain.

  • 6. Bonds, debentures, promissory notes
  • Use this option to report capital gains or capital losses from the disposition of bonds, debentures, Treasury bills, promissory notes, and other properties. Other properties include bad debts, foreign exchange gains and losses, and options, as well as discounts, premiums, and bonuses on debt obligations.

    Treasury bills (T-bills) and stripped bonds
    When a T-bill or a stripped bond is issued at a discount and the taxpayer keep it until it matures, the difference between the issue price and the amount you cash it in for is considered to be interest that accrued to the taxpayer. However, if the taxpayer sells the T-bill or stripped bond before it matures, you may have a capital gain or loss in addition to the interest accrued at that time.

    Before you calculate the capital gain or loss, you have to determine the amount of interest accumulated to the date of disposition. Subtract the interest from the proceeds of disposition and calculate the capital gain or loss in the usual way.

    Bad debts
    If a debt is owed to the taxpayer (other than a debt under a mortgage or a debt resulting from a conditional sales agreement), and it remains unpaid after the taxpayer exhausted all means to collect it, it becomes a bad debt. The debt will be a capital loss if the taxpayer acquired it:

    • to earn income from a business or property; or
    • as consideration or payment for the sale of capital property in an arm's length transaction.
    In most cases, the capital loss is equal to the adjusted cost base of the debt.

    To claim a capital loss on a bad debt, you have to file an election with the return. To make this election, write and sign a letter stating that the taxpayer want subsection 50(1) of the Income Tax Act to apply to the bad debt. Attach this letter to the return.

    If the debt is from the sale of personal-use property to a person with whom the taxpayer deal at arm's length, the situation is different. You can claim the capital loss in the year that the debt becomes a bad debt. However, the capital loss cannot be more than the capital gain you previously reported on the sale of the property that created the debt.

    Foreign exchange gains and losses
    Foreign exchange gains or losses from capital transactions in foreign currencies are considered to be capital gains or losses. However, DT Max will only report the amount of the net gain or loss for the year that is more than $200. If the net amount is $200 or less:

    • DT Max will report no capital gain or loss; and
    • the taxpayer do not have to report it on the return.
  • 7. Other mortgage foreclosures / repossessions
  • The taxpayer may have held a mortgage on a property but had to repossess the property later because the taxpayer was not paid all or a part of the amount owed under the mortgage. In this case, you may have to report a capital gain or loss.

    The following rules also apply when property is repossessed under a conditional sales agreement.

    For clarity, a mortgagee is a person who lends money under a mortgage. A mortgagor is a person who borrows money under a mortgage. If, as a mortgagee, the taxpayer repossess a property because the mortgagor failed to pay to the taxpayer the money owed under the mortgage, the taxpayer is considered to have purchased the property. At the time of repossession, taxpayers do not have a capital gain or loss. Any gain or loss will be postponed until the taxpayer sells the property.

    If the taxpayer is the mortgagor and the taxpayer property is repossessed because the taxpayer did not pay the money owed under the mortgage, the taxpayer is considered to have sold the property. Depending on the amount the taxpayer owed at the time of repossession, the taxpayer may have a capital gain, a capital loss, or, in the case of depreciable property, a terminal loss. However, if the property is personal-use property, the taxpayer cannot deduct the loss.

    Note
    If the capital gain or loss is from the disposition of qualified farm property, report the capital gain or loss on line 12400 in the «Qualified farm property» section of Schedule 3.

    Other tax implications
    DT Max will excluded the capital gains from a mortgage foreclosure or a conditional sales repossession from net income when calculating the claim for the goods and services tax/harmonized sales tax credit, the Canada Child Benefit, credits allowed under certain related provincial or territorial programs, and the age amount. DT Max will also exclude this income when calculating your social benefits repayment.

  • 8. Personal use property
  • This option refers to items that the taxpayer own primarily for the personal use or enjoyment of the family and himself. It includes all personal and household items, such as furniture, automobiles, boats, a cottage, and other similar properties.

    The adjusted cost base of a personal use property is deemed to be $1000 if the cost is less than $1000. Similarly, even if proceeds are less than $1000, they are deemed to be $1000. No amount is reported if neither Proceeds.cg nor ACB.cg is greater than $1000.

  • 9. Listed personal property (LPP)
  • LPP is a type of personal-use property. The principal difference between LPP and other personal-use properties is that LPP usually increases in value over time. LPP includes all or any part of any interest in or any right to the following properties:
    • prints, etchings, drawings, paintings, sculptures, or other similar works of art;
    • jewellery;
    • rare folios, rare manuscripts, or rare books;
    • stamps; and
    • coins.

    As with other personal use property, the adjusted cost base of a personal use property is deemed to be $1000 if the cost is less than $1000. Similarly, proceeds are deemed to be $1000 even if that amount is less than $1000. No amount will be reported if neither Proceeds.cg nor ACB.cg is greater than $1000. Precious (or LPP) losses can only be claimed against Precious (or LPP) capital gains. They can be carried back three years and carried forward seven years. DT Max will keep track of any carry forward amount. Use the keyword Carry-Back to carry back this amount to a previous year. DT Max will update the database for next tax season.

  • Virtual currency transactions
  • Resource properties
  • This refers to a capital gain on the disposal of resource properties. The calculation will be done on federal section "3. Mutual fund units, deferral or eligible small business corporation shares, and other shares including publicity traded shares" and the section B of Quebec Schedule G.

    The resource properties are eligible for the capital gain deduction on the Quebec tax return only.

  • Capital gain from T-slips
  • Allowable business investment loss (ABIL)
  • Total allowable business investment losses. DT Max will deduct the deductible loss in the current tax year, on line 21700 of the federal income tax return and line 234 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 NonCapLossCF. 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 be carried forward as Net-Cap-Loss.

  • ABIL from a bankrupt corporation
  • Enter the information pertaining to an eligible loss from a business investment if the loss results from the bankruptcy of a corporation. DT Max will calculate the eligible loss.
  • Partnership losses (line 85, TP-776.42)
  • Use this option to record, for Quebec alternative minimum tax purposes, the amount by wich your share of the allowable capital losses of the partnership exceeds the total of your share of the partnership's taxable capital gains and the taxable capital gain realized on the disposition of your interest in the partnership.

    DT Max will report the amount on line 85 of form TP-776.42 Alternative Minimum Tax.

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

Secondary keywordDescript.cg

Use Descript.cg to enter a short description ( max 30 characters) of the source of the capital gain/loss to be printed on schedule 3 and schedule G. Note: if PrincipalRes.cg is used in conjunction with Descript.cg, the description entered in PrincipalRes.cg will take precedent over any description entered in Descript.cg.

Secondary keywordIdent-number.g

Identification number of the corporation which issued the shares

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

Secondary keywordQue-NEQ-No.g

Quebec enterprise number (NEQ) of the corporation which issued the shares

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

Keyword in subgroupType.cg

Choose the type of capital property.

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

  • Land
  • Building
  • Farm property to child (excl. QFP)
  • Stripped bonds
  • Stripped Coupons are interest payment coupons detached from government bonds. Residuals are the bonds without their interest coupons. Both are sold as individual investments known as "Strips". Strips are always sold at a discount and mature at face value. The longer the term to maturity, the deeper the discount. The difference between the purchase price and the face value is your interest income.
  • Treasury bills
  • Treasury bills (T-bills) are very safe investments issued by the federal government and some provinces. These investments are sold at a lower price than their price at maturity. The difference between the purchase price and the selling price represents your return. Although the return on this category of investment is a capital gain, it is considered to be interest income for tax purposes and is therefore taxable at 100%.
  • Foreign exchange
  • Foreign exchange gains or losses from capital transactions in foreign currencies are considered to be capital gains or losses. However, you only have to report the amount of your net gain or loss for the year that is more than $200. If the net amount is $200 or less:
  • Certified ecological sensitive land
  • Other depreciable property
  • Other capital gains (T-Slips)
  • Other capital gains (T3-slips)
  • Qual. sm. bus. corp. shares (T-slips)
  • Qual. sm. bus. corp. shares (T3-slips)
  • Qual. farm property (QFP) (T-slips)
  • Qual. farm property (QFP) (T3-slips)
  • QFP - mortgage foreclosures/cond. sales rep.
  • Partnerships - your share of capital gains
  • Limited Partnership - your share of capital gains
  • Non-arm's length sale of shares (84.1(1) ITA)
  • Non-arm's length sale of shares (84.1(1) ITA) Section 84.1 of the ITA (federal) provides that where an individual disposes of shares of a corporation in favor of another corporation with which the individual does not deal at arm's length, generally when there is a non-share consideration (BOOT), the result will be a deemed dividend rather than a capital gain. It may also have a reduction in the paid-up capital (PUC)for the consideration received in shares.

    Therefore, it is possible that the disposition results in a deemed dividend under 84.1(1)(b) ITA. The formula in paragraph 84.1(1)(b) ITA determines whether a deemed dividend is realized or not.

    The purchasing corporation will be deemed to have paid a dividend and the taxpayer (the seller) is deemed to have received a dividend for an amount equal to: (A + D) - (E + F).

    • A ( keyword Increase-PUC ): Represents the increase in the paid-up capital of all the shares of the capital stock of the acquiring company in the transaction.
    • D ( keyword FMV-BOOT-Received ): Fair market value of consideration received other than shares (BOOT) (debts and money).
    • E: The highest of the :
      • i) ( keyword PUC-SharesDisp ): paid-up capital of the shares sold ("relevant shares");
      • ii) ( keyword ACB-mod-SharesDisp ): Adjusted cost base of the taxpayer's shares sold. The adjusted cost base must be modified by the adjustments provided for in paragraphs 84.1(2)(a) and (a.1).1(2)(a) and (a.1) ITAR; (ACB modified).
    • F ( keyword PUC-Reduction ): Total deductions required when calculating the paid-up capital of new shares received as consideration as calculated in paragraph 84.1(1)(a) ITA.

    There are seven conditions for section 84.1 of the ITA to trigger a deemed dividend:

    1. the transferor is an individual (including a trust);
    2. the transferor resides in Canada;
    3. the acquirer is a corporation;
    4. the property transferred by the transferor to the purchaser is a share of a corporation resident in Canada;
    5. the transferor and the purchaser are not dealing at arm's length;
    6. the acquirer and the corporation are related corporations (within the meaning of sub-section 186(4) ITA) immediately after the transaction;
    7. the non-share consideration received by the transferor exceeds the highest:
      (a) the paid-up capital of the shares transferred by the transferor to the purchaser;
      (b) the modified ACB of the shares transferred by the transferor to the acquirer.

    Note: Extended definition of arm's length = In addition to the definition of arm's length in sub-section 251(1) of the ITA, we must also be taken into account paragraphs 84.1(2)(b) and 84.1(2.2)(b) of the ITA. There will be a deemed arm's length relationship if immediately before the disposition, the vendor was in a group of lesser than six persons who controlled the corporation and immediately after the disposition, he was part of a group of lesser than six persons who controlled the buyer.

    Example Mr. A owns shares of ABC Inc.
    The cost of ABC Inc. shares = $ 1,000
    The paid-up capital of ABC Inc. shares = $ 1,000
    The FMV of the shares of ABC inc. = $ 100,000

    Mr. A incorporates Newco Inc. of which he holds all the shares. He receives in return for the sale of ABC's shares inc. $20,000 as a non-share consideration and preferred shares of Newco inc. whose FMV and legal paid-up capital is $ 80,000.

    Application of section 84.1 of the ITA:

    Step 1
    1. Calculation of the reduction of paid-up capital [84.1(1)(a)] :
    Formula = (A - B) x C / A
    A: Paid-up capital increase of all shares $80,000
    B: The highest of :
      i) Paid-up capital of shares sold $1,000  
      ii) ACB of the shares sold $1,000  
      Less : FMV of the non-share consideration $20,000 $0
    C: Paid-up capital increase of the shares of the category $80,000
    Reduction = (A - B) x C / A = (80,000 - 0) x 80,000/80,000 $80,000
     
    Calculation of paid-up tax capital of the shares of Newco inc.
    Paid-up capital before reduction $80,000
    Less : reduction under paragraph 84.1(1)(a) of the ITA (80,000)
    Paid-up tax capital $0

    Step 2
    2. Calculation of the deemed dividend [84.1(1)(b)] :
    Formula = (A + D) - (E + F)
    A: Paid-up capital increase $80,000
    D: FMV of the non-share consideration $20,000
    E: The highest of :
      i) Paid-up capital of shares sold $1,000  
      ii) ACB of shares sold $1,000 $1,000
    F: Reductions required of the paid-up capital under paragraph 84.1(1)(a) of the ITA $80,000
    Deemed dividend = (A + D) - (E + F) = (80,000 + 20,000) - (1,000 + 80,000) $19,000

    Step 3
    3. Calculation of the capital gain :
    Proceeds of disposition (20,000 + 80,000) $100,000
    Less : deemed dividend (19,000)
    Deemed proceeds of disposition $81,000
    Less : adjusted cost base (1,000)
    Capital gain $80,000
    Taxable capital gain $40,000

  • Non-arm's length sale of shares (transf. family business)
  • Non-arm's length sale of shares in the context of a transfer of a family business. Section 84.1 of the ITA (federal) provides that where an individual disposes of shares of a corporation in favor of another corporation with which the individual does not deal at arm's length, generally when there is a non-share consideration (BOOT), the result will be a deemed dividend rather than a capital gain. It may also have a reduction in the paid-up capital (PUC)for the consideration received in shares.

    There are seven conditions for section 84.1 of the ITA to trigger a deemed dividend:

    1. the transferor is an individual (including a trust);
    2. the transferor resides in Canada;
    3. the acquirer is a corporation;
    4. the property transferred by the transferor to the purchaser is a share of a corporation resident in Canada;
    5. the transferor and the purchaser are not dealing at arm's length;
    6. the acquirer and the corporation are related corporations (within the meaning of sub-section 186(4) ITA) immediately after the transaction;
    7. the non-share consideration received by the transferor exceeds the highest:
      (a) the paid-up capital of the shares transferred by the transferor to the purchaser;
      (b) the modified ACB of the shares transferred by the transferor to the acquirer.

    In Quebec since March 18, 2016, there is an easing for family business transfers that will result in the non-application of section 517.1 LI (equivalent to 84.1 ITA) in a sale of shares to a corporation by family members in respect of a non-share consideration.

    Briefly, the seven criteria to be met to result in the non-application of section 517.1 LI are:

    1. The seller is an individual (other than a trust);
    2. The seller was active in the business sold;
    3. The seller must no longer be active in the business after the sale;
    4. The seller does not retain the right control after the transaction;
    5. The seller must not hold any common shares after the transaction;
    6. The seller's residual financial interest is limited after the transaction (must not be greater than 60% of the FMV total shares);
    7. The buyer must be active in the business after the transaction.

    To take advantage of this easing in Quebec, the individual must first be taxable on a federal taxable dividend and use the capital gains deduction against the capital gain resulting from the disposition. The difference will be a deemed dividend in Quebec.

  • Other
  • Method of disposition - ATM
  • Method of disposition - platform
  • Method of disposition - peer-to-peer

Secondary keyword in subgroupIncrease-PUC  ALT-J 

Increase, if any, in the paid-up capital in respect of all shares of the capital stock of the purchaser corporation as a result of the issue of the new shares. This increase is determined without reference to article 84.1 of the federal Income Tax Act.

This amount corresponds to the letter "A" of the formula used to calculate the deemed dividend under paragraph 84.1(1)(b). The deemed dividend = (A+D)-(E+F). Use [Alt-J] to enter different values for other jurisdictions.

Secondary keyword in subgroupFMV-BOOT-Received  ALT-J 

Fair market value (FMV) of all consideration (other than the new shares) received by the taxpayer from the purchaser corporation for the subject shares.

This amount corresponds to the letter "D" of the formula used to calculate the deemed dividend under paragraph 84.1(1)(b). The deemed dividend = (A+D)-(E+F). Use [Alt-J] to enter different values for other jurisdictions.

Secondary keyword in subgroupPUC-SharesDisp  ALT-J 

Paid-up capital of the subject shares.

This amount is used for the calculation of the letter "E" which is the highest of the paid-up capital and the "hard" ACB of the formula used to calculate the deemed dividend under paragraph 84.1(1)(b). The deemed dividend = (A+D)-(E+F). Use [Alt-J] to enter different values for other jurisdictions.

Secondary keyword in subgroupACB-mod-SharesDisp  ALT-J 

Adjusted cost base (ACB) of the subject shares (Modified ACB). The ACB must be modified by the adjustments provided for in paragraphs 84.1(2)(a) and (a.1).1(2)(a) and (a.1) ITA; (Modified ACB).

Subject to the application of sections 517.4 to 517.4.2 of the Taxation Act.

This amount is used for the calculation of the letter "E" which is the highest of the paid-up capital and the "hard" ACB of the formula used to calculate the deemed dividend under paragraph 84.1(1)(b). The deemed dividend = (A+D)-(E+F). Use [Alt-J] to enter different values for other jurisdictions.

Secondary keyword in subgroupPUC-Reduction  ALT-J 

Total of all amounts each of which is an amount required to be deducted by the purchaser corporation under paragraph 84.1(1)(a) of ITA in computing the paid-up capital in respect of any class of shares of its capital stock by virtue of the acquisition of the subject shares.

This amount corresponds to the letter "F" of the formula used to calculate the deemed dividend under paragraph 84.1(1)(b). The deemed dividend = (A+D)-(E+F). Use [Alt-J] to enter different values for other jurisdictions.

Secondary keyword in subgroupPortionEligibleDiv  ALT-J 

Amount of the dividend that qualifies as eligible dividend Use [Alt-J] to enter different values for other jurisdictions.

Secondary keyword in subgroupDeemedDiv-OV  ALT-J 

Determined amount reported in your federal income tax return as a deemed dividend respecting the subject shares under paragraph 84.1(1)b) of the ITA.

The following options are applicable for the keyword DeemedDiv-OV.

  • Actual amount of ordinary dividends
  • Actual amount of eligible dividends
Use [Alt-J] to enter different values for other jurisdictions.

Secondary keyword in subgroupFedDeemedDiv-OV

Determined amount reported in your federal income tax return as a deemed dividend respecting the subject shares under paragraph 84.1(1)b) of the ITA.

The following options are applicable for the keyword FedDeemedDiv-OV.

  • Actual amount of ordinary dividends
  • Actual amount of eligible dividends

Secondary keyword in subgroupQueDeemedDiv-OV

Determined amount reported in your Quebec income tax return as a deemed dividend respecting the subject shares under paragraph 84.1(1)b) of the ITA.

The following options are applicable for the keyword QueDeemedDiv-OV.

  • Actual amount of ordinary dividends
  • Actual amount of eligible dividends

Secondary keyword in subgroupQue-ElectDeemed-CG

Use the keyword Que-ElectDeemed-CG if the taxpayer disposes of eligible shares of a corporation in the context of a transfer of a family business and you want to designate, for the year of the disposition of thoses shares, an amount as a deemed capital gain in respect of the gain realized on such disposition that would otherwise be considered a deemed dividend under sections 517.5.3 to 517.5.11 of the Quebec Taxation Act.

The amount that you may designate as a deemed capital gain must not be more than twice the amount of the capital gains deduction that you may claim for the year of the disposition of those shares, if those shares represented the only eligible property disposed of in the year.

Secondary keyword in subgroupEffectiveYieldRate

Enter the effective yield rate. The rate will be used to calculate accrued interest on the disposition date if the security is sold before the maturity date. The effective yield rate is obtained as follows:

[(Face value - Purchase price of the security) / Purchase price of the security] x (365 / number of holding days) = Effective yield rate

If the effective yield rate is not entered, DT Max will calculate the rate based on the informations entered.

Secondary keyword in subgroupAmounts-OVQ

Override of some calculated lines of form TP-517.5.5

The following options are applicable for the keyword Amounts-OVQ.

  • TP-517.5.5 line 16
  • TP-517.5.5 line 30
  • TP-517.5.5 line 35
  • TP-517.5.5 line 99

Secondary keywordProvince-Terr.g

Enter the province or territory of the property.

Secondary keyword#Shares.cg

Enter the number of shares of a qualified small business or stocks sold with the keyword #SHARES.CG .

This keyword is only available for the following options:

  • Qualified small business shares
  • Stock & other non-depreciable property
  • Allowable business investment loss

Secondary keywordFace-Value.c

Use Face-Value.c to enter the face value of the bonds. DT Max will remember the information.

Enter this information in the program as soon as you get it so that it is available upon disposition of the capital asset.

Secondary keywordDate-Disposition

Use Date-Disposition to enter the date of disposition of the capital property sold. This is relevant for all capital gains or losses except those appearing on a T-Slip.

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

Secondary keywordNbr-days-Retention

Use Nbr-days-Retention to enter the number of days the shares were held. DT Max will automatically calculate the date of acquisition based on the number of days entered.

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

Secondary keywordDate-Acquisition

Use Date-Acquisition to enter the date of acquisition of the capital property sold. This is relevant for all capital gains or losses except those appearing on a T-Slip.

The date will be remembered by DT Max. Enter this information as soon as you get it so that it will be available when the capital asset is disposed of.

Secondary keywordDate-Maturity.c

Use Date-Maturity.c to enter the maturity date of bonds.

It will be remembered by DT Max. Enter this information as soon as you get it so that it will be available when the capital asset is disposed of, and so that you can inquire about it when preparing next year's returns or for financial planning.

Secondary keywordProceeds.cg  ALT-J 

The amount received in payment for the capital property disposed of is entered as Proceeds.cg of the capital property disposition. These are the amounts to be printed on schedule 3 of the income tax return (schedule G of the Quebec tax return). Use [Alt-J] to enter different values for other jurisdictions.

Secondary keywordACB.cg  ALT-J 

Use ACB.cg to enter the ACB (adjusted cost base) of a capital property disposition. This may be a real disposition or a deemed disposition.

The ACB is usually the cost of a property plus any expenses to acquire it, such as commissions and legal fees. The cost of a capital property is its actual or deemed cost, depending on the type of property and how it was acquired. It also includes capital expenditures, such as the cost of additions and improvements to the property. We cannot add current expenses, such as maintenance and repair costs, to the cost base of a property.

Identical properties
Properties of a group are considered to be identical if each property in the group is the same as all the others. The most common examples of identical properties are shares of the same class of the capital stock of a corporation or units of a mutual fund trust.

We may buy and sell several identical properties at different prices over a period of time. For that case, we have to calculate the average cost of each property in the group at the time of each purchase to determine the ACB (dispositions of identical properties do not affect the ACB). The average cost is calculated by dividing the total cost of identical properties purchased (this is usually the cost of the property plus any expenses involved in acquiring it) by the total number of identical properties owned.

T3 slip
For 2004 and subsequent years, any amount reported in Box 42 of the T3 slip represents a change in the capital balance of the mutual fund trust. This amount is used when calculating the adjusted cost base (ACB) in the year of disposition..

Property for which the Form T664 or T664(Seniors) have been filed
Special rules also apply to determine the ACB of a property for which the Form T664 or T664(Seniors), Election to Report a Capital Gain on Property Owned at the End of February 22, 1994 have been filed. In most cases, the capital property is considered to have been sold at the end of February 22, 1994, and to have immediately reacquired it on February 23, 1994. The ACB of the property on February 23, 1994, depends on the type of property for which the election have been filed.

For an interest in, or shares of, a flow-through entity, in most cases the ACB of the interest or shares will not change.

Note
Generally, the Exempt capital gains balance (ECGB) expires after 2004. If by the end of 2004, you still have an ECGB, it must be add to the adjusted cost base of the shares of, or interest in, the flow-through entity.

For capital property, other than a flow-through entity, the ACB is usually the amount designated as proceeds of disposition on Form T664 or T664(Seniors). If the property is a cottage, rental property, or other non-qualifying real property, the ACB is the designated proceeds of disposition minus the reduction for non-qualifying real property.

Also, if the designated proceeds of disposition were more than the fair market value of the property at the end of February 22, 1994, the ACB on February 23, 1994, may be reduced.

Property inherit or receive as a gift For property received as a gift, it is generally considered to have been acquired at its fair market value (FMV) on the date acquired. Similarly, for a property win in a lottery, it is considered to have been acquired at its FMV at the time it was won.

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

Secondary keywordExpenses.cg  ALT-J 

Use Expenses.cg to enter the expenses related to a capital property disposition.

Outlays and expenses are amounts that are incurred to sell a capital property. They will be deducted from the proceeds of disposition when calculating your capital gain or loss. These types of expenses include fixing-up expenses, finders' fees, commissions, brokers' fees, surveyors' fees, legal fees, transfer taxes, and advertising costs.

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

Keyword in subgroupFlipping-Property

Starting on January 1, 2023, the new deeming rule applies to flipped property to ensure that profits are subject to full income à inclusion. Under the new rule, profits from the sale of a flipped property are deemed to be business income. Where the new deeming rule applies, profits on the sale cannot be treated as a capital gain (50-per-cent income inclusion) and the Principal Residence Exemption is not available.

If the answer is no, then the property is not considered a flipping property and any gain from the disposition of the property is taxable as a capital gain. If the answer is yes, then if one or more of the life events apply, the disposition due to, or anticipation of is not consider a flipping property and any gain from the dispotion of the property is taxable as a capital gain. If none of the life events apply to you, the housing unit is considered a flipped property and the gain is taxable as business income.

The 2022 Fall Economic Statement proposed that this deeming rule will be extended to include profits arising from the disposition of the rights to purchase a residential property via an assignment sale. Profits arising from an assignment sale would be deemed to be business income if the rights to purchase a property were assigned before the end of the 12-month holding period. The 12-month holding period would reset once the taxpayer who entered into a purchase and sale agreement secures ownership of the property.

Any losses resulting from the sale of a flipped property is deemed to be nil.

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

Secondary keyword in subgroupLifeEventsExcept

Select one of the life events that makes this not considered a flipped property.

A flipped property of a taxpayer is a housing unit located in Canada, that is not already considered to be inventory of the taxpayer and was owned by the taxpayer for less than 365 consecutive days prior to the disposition (12-month holding period) unless the disposition can reasonably be considered to occur due to, or in anticipation of one of a specified life events.

Where the new deeming rule does not apply because the property is not considered flipped property (e.g., due to a life event listed or because the property was owned by the taxpayer for at least 365 consecutive days prior to the disposition), it would remain a question of fact whether profits from the disposition are taxed as business income or a capital gain.

The following options are applicable for the keyword LifeEventsExcept.

  • Death of the taxpayer or a related person
  • Related person joined the taxpayer's household
  • Taxpayer joined a related person's household
  • Breakdown of a marriage or common-law partnership
  • Threat to the personal safety of the taxpayer
  • Serious disability/illness of the taxpayer/related person
  • Elig. relocation to the new work location or school
  • Involuntary termination of employment
  • Insolvency of the taxpayer
  • Destruction or expropriation of the taxpayer's property

Secondary keywordForeignCurrency

Indicate whether the transaction has been made in foreign currency (yes/no).

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

Secondary keywordCountry.cg

Enter the name of the country of origin regarding the income from sources outside of Canada.

Secondary keywordExchange.cg

Use this keyword to indicate the exchange rate applicable the proceeds of disposition. Enter this rate only if the proceeds of disposition are expressed in foreign currency.

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

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

  • United States (dollar)[2023: 1.3497] (Annual)
  • United States (dollar)[2023: 1.3422] (January)
  • United States (dollar)[2023: 1.3450] (February)
  • United States (dollar)[2023: 1.3682] (March)
  • United States (dollar)[2023: 1.3485] (April)
  • United States (dollar)[2023: 1.3520] (May)
  • United States (dollar)[2023: 1.3288] (June)
  • United States (dollar)[2023: 1.3215] (July)
  • United States (dollar)[2023: 1.3485] (August)
  • United States (dollar)[2023: 1.3535] (September)
  • United States (dollar)[2023: 1.3717] (October)
  • United States (dollar)[2023: 1.3709] (November)
  • United States (dollar)[2023: 1.3431] (December)
  • Argentina (peso)
  • Australia (dollar)[2023: 0.8967]
  • Bahamas (dollar)
  • Brazil (real)[2023: 0.2704]
  • Chile (peso)
  • Chine (renminbi)[2023: 0.1907]
  • Colombia (peso)
  • Communauté Financière Africaine (franc)
  • Comptoirs Français du Pacifique (franc)
  • Croatia (kuna)
  • Czech Republic (koruna)
  • Denmark (krone)
  • East Caribbean (dollar)
  • Europe (Euro)[2023: 1.4597]
  • Fiji (dollar)
  • Ghana (cedi)
  • Guatemala (quetzal)
  • Honduras (lempira)
  • Hong Kong (dollar)[2023: 0.1724]
  • Hungary (forint)
  • Iceland (krona)
  • India (rupee)[2023: 0.01635]
  • Indonesia (rupiah)[2023: 0.000089]
  • Israel (new shekel)
  • Jamaica (dollar)
  • Japan (yen)[2023: 0.009630]
  • Malaysia (ringgit)
  • Mexico (peso)[2023: 0.07618]
  • Morocco (dirham)
  • Myanmar (Burma) (kyat)
  • Netherlands Antilles (guilder)
  • New Zealand (dollar)[2023: 0.8287]
  • Norway (krone)[2023: 0.1278]
  • Pakistan (rupee)
  • Panama (balboa)
  • Peru (new sol)[2023: 0.3606]
  • Philippines (peso)
  • Poland (zloty)
  • Romania (nouveau leu)
  • Russia (ruble)[2023: 0.01600]
  • Serbia (dinar)
  • Singapore (dollar)[2023: 1.0051]
  • South Africa (rand)[2023: 0.07323]
  • South Korea (won)[2023: 0.001033]
  • Sri Lanka (rupee)
  • Sweden (krona)[2023: 0.1273]
  • Switzerland (franc)[2023: 1.5024]
  • Taiwan (new dollar)[2023: 0.04334]
  • Thailand (baht)
  • Trinidad and Tobago (dollar)
  • Tunisia (dinar)
  • Turkey (lira)[2023: 0.05860]
  • United Arab Emirates (riyal)[2023: 0.3597]
  • United Kingdom (pound sterling)[2023: 1.6784]
  • Venezuela (bolivar fuerte)
  • Vietnam (dong)
  • Other (specify)

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

Secondary keywordACB-Exchange.cg

Use this keyword to indicate the exchange rate applicable to the adjusted cost base. Enter this rate only if the adjusted cost base is expressed in foreign currency.

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

The following options are applicable for the keyword ACB-Exchange.cg.

  • United States (dollar)[2023: 1.3497] (Annual)
  • United States (dollar)[2023: 1.3422] (January)
  • United States (dollar)[2023: 1.3450] (February)
  • United States (dollar)[2023: 1.3682] (March)
  • United States (dollar)[2023: 1.3485] (April)
  • United States (dollar)[2023: 1.3520] (May)
  • United States (dollar)[2023: 1.3288] (June)
  • United States (dollar)[2023: 1.3215] (July)
  • United States (dollar)[2023: 1.3485] (August)
  • United States (dollar)[2023: 1.3535] (September)
  • United States (dollar)[2023: 1.3717] (October)
  • United States (dollar)[2023: 1.3709] (November)
  • United States (dollar)[2023: 1.3431] (December)
  • Argentina (peso)
  • Australia (dollar)[2023: 0.8967]
  • Bahamas (dollar)
  • Brazil (real)[2023: 0.2704]
  • Chile (peso)
  • Chine (renminbi)[2023: 0.1907]
  • Colombia (peso)
  • Communauté Financière Africaine (franc)
  • Comptoirs Français du Pacifique (franc)
  • Croatia (kuna)
  • Czech Republic (koruna)
  • Denmark (krone)
  • East Caribbean (dollar)
  • Europe (Euro)[2023: 1.4597]
  • Fiji (dollar)
  • Ghana (cedi)
  • Guatemala (quetzal)
  • Honduras (lempira)
  • Hong Kong (dollar)[2023: 0.1724]
  • Hungary (forint)
  • Iceland (krona)
  • India (rupee)[2023: 0.01635]
  • Indonesia (rupiah)[2023: 0.000089]
  • Israel (new shekel)
  • Jamaica (dollar)
  • Japan (yen)[2023: 0.009630]
  • Malaysia (ringgit)
  • Mexico (peso)[2023: 0.07618]
  • Morocco (dirham)
  • Myanmar (Burma) (kyat)
  • Netherlands Antilles (guilder)
  • New Zealand (dollar)[2023: 0.8287]
  • Norway (krone)[2023: 0.1278]
  • Pakistan (rupee)
  • Panama (balboa)
  • Peru (new sol)[2023: 0.3606]
  • Philippines (peso)
  • Poland (zloty)
  • Romania (nouveau leu)
  • Russia (ruble)[2023: 0.01600]
  • Serbia (dinar)
  • Singapore (dollar)[2023: 1.0051]
  • South Africa (rand)[2023: 0.07323]
  • South Korea (won)[2023: 0.001033]
  • Sri Lanka (rupee)
  • Sweden (krona)[2023: 0.1273]
  • Switzerland (franc)[2023: 1.5024]
  • Taiwan (new dollar)[2023: 0.04334]
  • Thailand (baht)
  • Trinidad and Tobago (dollar)
  • Tunisia (dinar)
  • Turkey (lira)[2023: 0.05860]
  • United Arab Emirates (riyal)[2023: 0.3597]
  • United Kingdom (pound sterling)[2023: 1.6784]
  • Venezuela (bolivar fuerte)
  • Vietnam (dong)
  • Other (specify)

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

Secondary keywordExp-Exchange.cg

Use this keyword to indicate the exchange rate applicable to the outlays and expenses relating to capital property dispositions. Enter this rate only if the outlays and expenses relating to capital property dispositions are expressed in foreign currency.

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

The following options are applicable for the keyword Exp-Exchange.cg.

  • United States (dollar)[2023: 1.3497] (Annual)
  • United States (dollar)[2023: 1.3422] (January)
  • United States (dollar)[2023: 1.3450] (February)
  • United States (dollar)[2023: 1.3682] (March)
  • United States (dollar)[2023: 1.3485] (April)
  • United States (dollar)[2023: 1.3520] (May)
  • United States (dollar)[2023: 1.3288] (June)
  • United States (dollar)[2023: 1.3215] (July)
  • United States (dollar)[2023: 1.3485] (August)
  • United States (dollar)[2023: 1.3535] (September)
  • United States (dollar)[2023: 1.3717] (October)
  • United States (dollar)[2023: 1.3709] (November)
  • United States (dollar)[2023: 1.3431] (December)
  • Argentina (peso)
  • Australia (dollar)[2023: 0.8967]
  • Bahamas (dollar)
  • Brazil (real)[2023: 0.2704]
  • Chile (peso)
  • Chine (renminbi)[2023: 0.1907]
  • Colombia (peso)
  • Communauté Financière Africaine (franc)
  • Comptoirs Français du Pacifique (franc)
  • Croatia (kuna)
  • Czech Republic (koruna)
  • Denmark (krone)
  • East Caribbean (dollar)
  • Europe (Euro)[2023: 1.4597]
  • Fiji (dollar)
  • Ghana (cedi)
  • Guatemala (quetzal)
  • Honduras (lempira)
  • Hong Kong (dollar)[2023: 0.1724]
  • Hungary (forint)
  • Iceland (krona)
  • India (rupee)[2023: 0.01635]
  • Indonesia (rupiah)[2023: 0.000089]
  • Israel (new shekel)
  • Jamaica (dollar)
  • Japan (yen)[2023: 0.009630]
  • Malaysia (ringgit)
  • Mexico (peso)[2023: 0.07618]
  • Morocco (dirham)
  • Myanmar (Burma) (kyat)
  • Netherlands Antilles (guilder)
  • New Zealand (dollar)[2023: 0.8287]
  • Norway (krone)[2023: 0.1278]
  • Pakistan (rupee)
  • Panama (balboa)
  • Peru (new sol)[2023: 0.3606]
  • Philippines (peso)
  • Poland (zloty)
  • Romania (nouveau leu)
  • Russia (ruble)[2023: 0.01600]
  • Serbia (dinar)
  • Singapore (dollar)[2023: 1.0051]
  • South Africa (rand)[2023: 0.07323]
  • South Korea (won)[2023: 0.001033]
  • Sri Lanka (rupee)
  • Sweden (krona)[2023: 0.1273]
  • Switzerland (franc)[2023: 1.5024]
  • Taiwan (new dollar)[2023: 0.04334]
  • Thailand (baht)
  • Trinidad and Tobago (dollar)
  • Tunisia (dinar)
  • Turkey (lira)[2023: 0.05860]
  • United Arab Emirates (riyal)[2023: 0.3597]
  • United Kingdom (pound sterling)[2023: 1.6784]
  • Venezuela (bolivar fuerte)
  • Vietnam (dong)
  • Other (specify)

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

Keyword in subgroupPrincipalRes.cg

Use this keyword to identify if the personal used property disposed is a principal residence [yes] or not [no]. If you select the option [yes] then you may enter the description of the property wich will appear on the designation section of form T2091, and if applicable in the same section of QC form TP-274-V.

You may also enter the remaining information as they relate to the civic address of the property using the keywords Street, City, Province, and PostCode. This information will take precedent over any other information you've entered in keyword Description.

Note A reference note will automatically appear on Schedule 3 (if applicable on Schedule G (QC) also) to desigante the disposition as the property identified on Form T2091: "Principal residence (T2091)."

Secondary keyword in subgroupApartment.res

Use the keyword Apartment.res to enter the apartment number where the principal residence is located.

Secondary keyword in subgroupStreet.res

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

Secondary keyword in subgroupCity.res

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

Secondary keyword in subgroupProvince.res

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

Secondary keyword in subgroupPostCode.res

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

Secondary keyword in subgroupZip-Code.res

Use the keyword Zip-Code.res to enter the foreign postal code of Residence which will replace the postal code of the residence address on the T1 return.

Secondary keyword in subgroupCountry.res

If the client's residence address is outside of Canada, the keyword Country.res is used to enter the State and Country of Residence.

Secondary keywordDesignationForms

Select the form to use (T2091 or T1255). Form T1255 - Designation of a property as a principal residence by the legal representative of a deceased individual shall be used if the designation is made by the legal representative of the deceased individual. In other cases, choose the Form T2091(IND) - Designation of a property as a principal residence by an individual (other than a personal trust)

The following options are applicable for the keyword DesignationForms.

  • T2091
  • T1255

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

Secondary keywordLot-Number

Use the keyword Lot-Number to enter the lot number.

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

Keyword in subgroupDesignation.res

Use the keyword Designation.res to specify the taxation years period during which the property was designated as principal residence on form T2091(IND) titled Designation of a property as a principal residence by an individual.

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

  • Period after 1971 to current year
  • Designate zero year as a principal residence

Secondary keyword in subgroupYears.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

Secondary keywordYear-Servitude

Use the keyword Year-Servitude to enter the year a real servitude encumbering the property was established.

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

Secondary keywordProperty-1981.c  ALT-J 

Use the keyword Property-1981.c to enter the information needed to calculate the capital gain on form T2091(IND) titled Designation of a property as a principal residence by an individual 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.

Secondary keywordElection-1994.c  ALT-J 

Use the keyword Election-1994.c to enter the information needed to calculate the reduction of the capital gain on form T2091(IND)-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.

Secondary keywordSpouseDesMonths  ALT-J 

Use the keyword SpouseDesMonths to enter the number of months for each period that the spouse or common-law partner designated this property as a principal residence on form T2091(IND).

This information is needed to calculate the reduction of the capital gain on form T2091(IND)-WS titled Principal residence worksheet.

The following options are applicable for the keyword SpouseDesMonths.

  • 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.

Keyword in subgroupChange-In-Use.c

Use this keyword if an election is made pursuant to subsection 45(3) ITA and section 286.1 LI (Québec) to the effect that the property previously used to produce income and which has since become a principal residence is deemed not to have been disposed of at the time it became the principal residence. By the same token, confirm also that no depreciation has been claimed on the property for taxation years subsequent to 1984. Subsection 45(4) ITA provides that the effect of claiming the CCA is to cancel the election under subsection 45(3) ITA.

Conditions to be respected in order to make the election pursuant to subsection 45(3) ITA:

  • The property must become the taxpayer's principal residence (rental income to a principal residence);
  • Can not make the election if CCA claimed after 1984 until the date of change of use 45(4) ITA.

This election defers the application of the deemed disposition to the date of the actual disposition of the capital property. For a maximum period of 4 years prior to the time when the taxpayer ceases to use his or her home to generate income, the taxpayer making the election may designate that property as a principal residence for the purposes of exemption for principal residence.

The government's new position is that we can no longer choose subsection 45(3) ITA on one of the duplex units that the individual will now use as a principal residence (CRA document number: 2016-0651791C6).

The following options are applicable for the keyword Change-In-Use.c.

  • No
  • Yes

Secondary keyword in subgroupYearsChange.res

Use the keyword YearsChange.res to enter the period of taxation years subject to an election .

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

  • From
  • To

Secondary keywordNon-Resident.cg

If the taxpayer disposed of a principal residence after October 2, 2016, and was a non-resident throughout the year of acquisition of the property, he/she is not eligible for the plus 1 rule granted by law in the calculation of the principal residence exemption.

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

Secondary keywordAmount.cgs  ALT-J 

Use Amount.cgs to enter the total amount of capital gains from the T-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.

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

Secondary keywordReserves.cg  ALT-J 

Use this keyword 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.

DT Max will carry forward the amount to be brought into income in future years. It is the tax preparer who must decide when and how much of the reserves to bring into income (see Cap-Reserves ).

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

  • Reserve on disposition
  • Reserve on disposition of property to child
Use [Alt-J] to enter different values for other jurisdictions.

Secondary keywordDefer-Gain  ALT-J 

This amount is intended for line 16100 schedule 3. Individuals (other than trusts) may defer capital gains incurred on certain small business investments disposed of in 2023. This deferral applies to dispositions where you use the proceeds to acquire another small business investment. The adjusted cost base (ACB) of the new investment is reduced by the capital gain deferred from the initial investment.

To qualify for the capital gains deferral for investment in small business, the investment must be in an eligible small business corporation. Use [Alt-J] to enter different values for other jurisdictions.

Secondary keywordBusinessLoan  ALT-J 

If your client holds a debt (such as an advance from a shareholder or an administrator, a loan or a guarantee (suretyship)) from a corporation operating a small business, and if that debt is considered non recoverable at the end of the year, use the keyword BusinessLoan in order to get a deemed disposition of the debt and therefore claim that amount as an allowable business investment loss. To be deemed as having disposed of the debt, your client must join to his tax return a letter bearing his signature in which he states that he has made an election under subsection 50(1) of the Income Tax Act.

Use [Alt+J] to enter different values from other jurisdictions.

The following options are applicable for the keyword BusinessLoan.

  • Advance from a shareholder
  • Guarantee (suretyship)
Use [Alt-J] to enter different values for other jurisdictions.

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 22100 - Carrying charges, interest expenses, and other expenses

Keyword in subgroupABIL-Details

Details pertaining to ABIL deduction.

The following options are applicable for the keyword ABIL-Details.

  • Information respecting the corporation
  • Information respecting your investment in shares
  • Information respecting a case of a loan
  • Information respecting a case of an endorsement

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

Secondary keyword in subgroupCorp-Name.a

Enter the name of corporation.

Secondary keyword in subgroupEnd-Date.a

Enter the date at which corporation permanently ceased its operations (if applicable).

Secondary keyword in subgroupReg-Number.a

Enter the registration number of corporation.

Secondary keyword in subgroupQReg-Number.a

Enter the Quebec registration number of corporation.

Secondary keyword in subgroupMRQ-ID-Number.a

MRQ identification number of the corporation (1111111111 IC 0001)

Secondary keyword in subgroupActivities.a

Enter the type of business or operations.

Secondary keyword in subgroupEmploye#.a

Enter the number of full-time employees of the corporation.

Secondary keyword in subgroupPartners.a

Enter the names of corporation's shareholders.

Secondary keyword in subgroupAdministr.a

Enter the names of corporation's officers.

Secondary keyword in subgroupMeasures.a

Describe the steps taken to recover debt.

Secondary keyword in subgroupEndorsement.a

Describe the steps taken to comply with endorsement.

The following options are applicable for the keyword Endorsement.a.

  • You continue to make payments
  • You fully reimburse the amounts owed by the corp.

Secondary keyword in subgroupRelated.a

Enter the relationship with buyer.

Secondary keyword in subgroupRelation.a

What is the relationship?

Secondary keywordFor-Resource

If the capital gain is due to a disposition of a foreign resource property, enter "Yes".

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

Secondary keywordGain-Tslip

If your client has elected to report a capital gain on a mutual fund or other flow-through, enter the ineligible gain recorded on the t-slip with this keyword to enable the application of the capital gain reduction against the t-slip gain. The exempt gain balance will be reduced by the capital gains reduction applied.

The following options are applicable for the keyword Gain-Tslip.

  • Other capital gains (T-Slips)
  • Other capital gains (T3-slips)

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

Secondary keywordCap-GainOV  ALT-J 

Use Cap-GainOV to override the gain within this capital gains group. Note that using an override here may give the impression that some of the calculations don't work. It is better to find the correct amounts and enter them. Incorrect amounts will be entered into the keying field for proceeds, which will cause a delay and may lead to further problems. Use [Alt-J] to enter different values for other jurisdictions.

Secondary keywordStockOp-Ben  ALT-J 

Use the keyword StockOp-Ben to enter the stock option benefits realized with the disposition of employee stock option shares.

This amount represent any amount included in the income as a taxable employee option benefit for the securities (even if a claim for security option deduction have been made).

DT Max will add this amount to the ACB. This amount should be entered to avoid double taxation on the benefits already included as employment income from the T4 slip or as a disposition of deferred stock option shares.

If the stock option shares were donated, an additional deduction may be claimed on federal line 24900 or Quebec line 297. Use [Alt-J] to enter different values for other jurisdictions.

Secondary keywordCapitalGain-at100%  ALT-J 

Use the keyword CapitalGain-at100% to enter the capital gain taxable at 100% inclusion rate (under ITA sub-section 100(1)). Sub-sections 100(1) to (1.5) are intended to prevent the transfer of an interest in a partnership to a tax-exempt person in order to trigger the recognition of gains accrued on the property of the partnership without having tax payable.

The portion of the taxpayer's capital gain for the year from the provision that can reasonably be considered to be attributable to the increase in the value of any property of the partnership that is capital property (other than depreciable property) held directly or indirectly through one or more other partnerships is taxable at the 50% inclusion rate and the balance is taxable at 100%.

If all the assets of the partnership are inventory, depreciable property or resource property, the capital gain will be taxable at 100% unless an exception applies. If there are also fixed assets (other than depreciable property), then there is a breakdown.

If you report a 100% amount, this amount will be include on line 19900 of Schedule 3 and a note "Sub-section 100(1) ITA applies" will be add under the line 19900

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

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

Secondary keywordProvince.c

If your client is a non-resident, indicate in which province 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.

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

Secondary keywordDeemed-Disp

Use Deemed-Disp to enter the deemed disposition of property by an emigrant of Canada on the Form T1243. This form is used if you ceased to be a resident of Canada in the year and you were deemed to have disposed of property when you left Canada, excluding the following properties:
  • Canadian real estate, Canadian resource property, and timber resource property;
  • Canadian business property (including inventory) if the business is carried on through a permanent establishment in Canada;
  • pensions and similar rights, including registered retirement savings plans, registered retirement income funds, and deferred profit-sharing plans;
  • rights to certain benefits under employee profit-sharing plans, employee benefit plans, employee trusts, and salary deferral arrangements;
  • certain rights or interest in a trust;
  • property you owned when you last became a resident of Canada, or property you inherited after you last became a resident of Canada, if you were a resident of Canada for 60 months or less during the 10-year period before you emigrated;
  • employee security options subject to Canadian tax; and
  • interests in life insurance policies in Canada (other than segregated fund policies).

Note: You can elect to defer the payment of tax on income relating to the deemed disposition of property to completing Form T1244, Election, Under Subsection 220(4.5) of the Income Tax Act, to Defer the Payment of Tax on Income Relating to the Deemed Disposition of Property by using the Election-DeferTax .

Use Deemed-Disp to enter the deemed disposition of property by an emigrant of Canada on the Form T2061A. This form is used if you ceased to be a resident of Canada and want to elect under subparagraph 128.1(4)(d) of the Income Tax Act to recognize the deemed disposition of any of the following property:

  • real property in Canada, Canadian resource property, or timber resource property; or
  • capital property used in, eligible capital property in respect of, or property described in the inventory of a business you carried on through a permanent establishment in Canada at the time you ceased to be a resident of Canada.

Secondary keywordProperty-T2061A

Use Property-T2061A to include the disposition in the list of properties and make the election by an emigrant to report deemed dispositions of property and any resulting capital gain or loss on the Form T2061A.

The following options are applicable for the keyword Property-T2061A.

  • Yes
  • No

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

Secondary keywordProperty-T1244

Use Property-T1244 to include the disposition in the list of properties by an emigrant of Canada on the Form T1244.

The following options are applicable for the keyword Property-T1244.

  • Yes
  • No

Secondary keywordProperty-T1161

Use Property-T1161 to included the disposition in the list of properties by an emigrant of Canada on the Form T1161. This form is used if you ceased to be a resident of Canada at any time in the year and the fair market value of all the properties you owned when you left Canada was more than $25,000, not including the following properties:
  • cash (including bank deposits);
  • pension plans, annuities, registered retirement savings plans, registered retirement income funds, retirement compensation arrangements, employee benefit plans, and certain other deferred benefit plans;
  • property you owned when you last became a resident of Canada, or property you inherited after you last became a resident of Canada, if you were a resident of Canada for 60 months or less during the 10-year period before you emigrated and the property is not taxable Canadian property; and
  • any item of personal-use property (such as your household effects, clothing, cars, collectibles) that has a fair market value of less than $10,000.
File your return by the filing due date. The penalty for failing to file this form by the due date is $25 a day. There is a minimum penalty of $100, and a maximum penalty of $2,500.

The following options are applicable for the keyword Property-T1161.

  • Yes
  • No

Secondary keywordOwn-%Share.c

Enter the percentage of your client's share of the capital gain/loss.

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

Secondary keywordSpouse-Share.c

Use the keyword Spouse-Share.c to enter the remaining percentage of capital gain/loss, and indicate the treatment.

If the remaining capital gain/loss belongs to the taxpayer's spouse, DT Max will add it to the spouse's tax return. Otherwise, the balance will not be added automatically to anyone else's return.

The following options are applicable for the keyword Spouse-Share.c.

  • Transfer remainder to spouse
  • This option indicates that the income is shared with the spouse.

    DT Max will claim the amount on the taxpayer's income tax return according to the percentage (%) specified, and will allocate the remainder to the spouse.

    This option allows you to enter the data shared by the spouses only once. You do not have to enter the data in both spouses' files

  • Ignore remainder
  • This option indicates that the income is not shared between the spouses.

    DT Max will claim the amount on the taxpayer's income tax return according to the percentage (%) specified, and will ignore the remainder.

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

Keyword in subgroupGift.cg

Specify whether this is a taxable capital gain resulting from a gift of capital property made in the year. DT Max will report that capital gain on line 12700 of the federal return and on line 139 of the Quebec return. If a capital gain deduction is claimed, DT Max will report the amount of the deduction on line 25400 of the federal return and on line 292 of the Quebec return. The two amounts will also be used to calculate the limit on income in the section entitled "Charitable donations" on page 3 of the federal return (the Ministère du revenu du Québec has not implemented that new rule).

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

  • Increased limit for donations (25%) - Depreciable
  • Use this option to increase the limit for donations by 25% if the taxpayer donates cash or other property to a registered charity or other qualified donor in the year, the total donations limit will generally be 75% of the net income for the year.

    The line 4 of schedule 9 is calculated as follow :

    The amount of current year taxable capital gains from capital property donated in the year minus the amount of current year capital gains deduction from capital property donated in the year. DT Max will report the result on line 4 of schedule 9.

  • Increased limit for donations (25%) - Capital property
  • Increased limit for donations by 25%
  • Inclusion rate reduced - T1170
  • Use this option to generate the form T1170. The T1170 is used if, in 2023, the taxpayer donated any of the following types of properties to a registered charity or other qualified donor (other than a private foundation):
    • a share, debt obligation, or right listed on a prescribed stock exchange;
    • a share of the capital stock of a mutual fund corporation;
    • a unit of a mutual fund trust;
    • an interest in a related segregated fund trust;
    • a prescribed debt obligation; or
    • ecologically sensitive land (including a covenant, an easement, or in the case of land in Quebec, a real servitude).

    This form allows the taxpayer to calculate the adjusted amount of the capital gains resulting from the donation. If the donation results in a capital loss, enter the loss directly on Schedule 3.

  • Additional deduction for stock option shares
  • Use this option if the taxpayer made a gift of securities acquired under a security option plan. An additional deduction on line 24900 of your return can be claimed for donating publicly-listed shares of corporations or mutual fund units acquired through the employer's security option plan. However all of the following conditions must be met :
    • The security was acquired under an option that was granted to the taxpayer as an employee of a corporation or a mutual fund trust.
    • The security was disposed in the year it was acquired, and not more than 30 days after its acquisition, by donating it to a qualified donor that is not a private foundation.
    • The taxpayer is entitled to claim a security option deduction on line 24900.

    DT Max will calculate 25% of the amount entered in the keyword StockOp-Ben. This deduction will appear on federal line 249 and on Quebec line 297.

  • Not a gift

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 34900 - Donations and gifts (Schedule 9)

Secondary keyword in subgroupEligible-Gift.cg  ALT-J 

Use the keyword Eligible-Gift.cg to enter name of the charity and 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 Form T1170. If no amount is entered with this keyword, DT Max will assume the eligible amount to be equal to the proceeds. Use [Alt-J] to enter different values for other jurisdictions.

Secondary keyword in subgroupCCA-Recovery.cg  ALT-J 

If a gift, enter the amount of recaptured depreciation included on the 2023 return. Use [Alt-J] to enter different values for other jurisdictions.

Secondary keyword in subgroupCCA-Class.cg

Class No. of property

The following options are applicable for the keyword CCA-Class.cg.

  • Class 1 - 4%
  • Most buildings bought after 1987, including components such as wiring, plumbing, heating, and cooling systems. Buildings with a cost exceeding $50,000 should be entered in separate classes.
  • Class 1 - 6% (after March 18, 2007)
  • Other non-residential buildings acquired by a taxpayer after March 18, 2007.

    To be eligible for one of the additional allowances, a building will be required to be placed into a separate class. If the taxpayer forgoes the separate class, the current rate of 4% will apply.

    Natural gas distribution pipelines acquired after March 18, 2007. Natural gas distribution pipelines are pipelines through which natural gas is carried from transmission pipelines to consumers. They include both distribution mains, which run to the edge of a customer's property, and service lines, which run from the edge of the customer's property to the house or building.

  • Class 1 - 10% (after March 18, 2007)
  • Eligible non-residential buildings acquired after March 18, 2007, used for manufacturing or processing in Canada of goods for sale or lease will be increased to 10%.

    To be eligible for one of the additional allowances, a building will be required to be placed into a separate class. If the taxpayer forgoes the separate class, the current rate of 4% will apply.

    In order to be eligible for the 6% additional allowance, at least 90% of a building (measured by square footage) must be used for the designated purpose at the end of the tax year. Manufacturing and processing buildings that do not meet the 90% use test will be eligible for the additional 2% allowance if at least 90% of the building is used for non-residential purposes at the end of the tax year.

  • Class 1 - 10% (LNG after February 19, 2015)
  • Accelerated CCA for liquefied natural gas (LNG) after February 19, 2015 and before 2025.

    Non-residential buildings at a facility that liquefies natural gas are eligible for a CCA rate of 4% plus the lesser of 6% and income from eligible liquefaction activities attributable to that facility

  • Class 2 - 6%
  • Electrical generating equipment, pipelines, and plant and equipment used in the production or distribution of electrical energy or gas or in the distribution of water or heat.
  • Class 3 - 5%
  • Most buildings including components bought after 1978 and before 1988. However, you may have to include part of the cost of additions made after 1987 in class 1. For more details, see Interpretation Bulletin IT-79, Capital Cost Allowance - Buildings or Other Structures. Buildings acquired before 1988 with a cost exceeding $50,000 should be entered in separate classes.
  • Class 4 - 6%
  • Railway or trolley bus systems.
  • Class 5 - 10%
  • Pulp mills acquired before 1962.
  • Class 6 - 10%
  • Frame, log, stucco on frame, galvanized iron, or corrugated metal buildings that do not have any footings below the ground. Class 6 also includes fences and greenhouses. Buildings with a cost exceeding $50,000 should be entered in separate classes.
  • Class 7 - 15%
  • Canoes, rowboats, and most other vessels and their motors, furniture, and fittings. For more details, see Interpretation Bulletin IT-267, Capital Cost Allowance - Vessels.
  • Class 8 - 20%
  • Property that you did not include in any other class. Some examples are fixtures, furniture, machinery, photocopiers, refrigeration equipment, telephones, and tools costing $200 or more. Class 8 also includes outdoor advertising signs you bought after 1987. Under proposed legislative changes, data network infrastructure equipment acquired after March 22, 2004 (usually included in class 8 at 20%) will be included in a new class 46 with a 30% CCA rate.
  • Class 8 - 20% (Class 8.1 - 33 1/3%)
  • A drawing, print, engraving, sculpture, painting or other work of art of the same nature by a Canadian artist in order to display it at his place of business.
  • Class 9 - 25%
  • Aircraft, including furniture or equipment attached to the aircraft, and spare parts.
  • Class 10 - 30%
  • Automobiles, except those you use as a taxi or in a daily rental business, including vans, trucks, tractors, wagons, and trailers. General-purpose electronic data-processing equipment (commonly called computer hardware) and systems software. Under proposed legislative changes of March 23, 2004, computer equipment and systems software will be included in new class 45 and the CCA rate will increase from 30% to 45%. The current rule allowing a separate class election is not available for equipment that qualifies for the 45% rate. However, you may elect to have the current rule apply for equipment that is acquired before 2005.
  • Class 10.1 - 30%
  • A passenger vehicle (automobiles costing over $30 000); the depreciable cost is limited to $30 000. No recapture or terminal loss occurs on Class 10.1 disposals and half-year CCA is also allowed in the year of a disposal.
  • Class 11 - 35%
  • Advertising signs and billboards which are used to earn rental income and were acquired before 1988.
  • Class 12 - 100%
  • China, cutlery, kitchen utensils that cost under $500, linen, uniforms, dies, jigs, moulds, cutting or shaping parts of a machine, tools and medical or dental instruments that cost under $500, computer software (except systems software), and video cassettes bought after February 15, 1984, that you rent and do not expect to rent to any one person for more than 7 days in a 30-day period.
  • Class 13 SL
  • Leasehold interest - You can claim CCA on a leasehold interest, but the maximum rate depends on the type of leasehold interest and the terms of the lease. Leasehold improvements are amortized on a straight-line basis over the number of years in the lease term. The minimum amortization period is 5 years and the maximum is 40 years. If the number of months entered for an addition in the Additions.sl keyword is not within this range, DT Max will use the minimum or maximum allowed, as is applicable.

    Separate classes are required for leasehold interests related to buildings erected on leased land.

  • Class 14 SL
  • Patents, franchises, concessions, or licences for a limited period. Your CCA is whichever of the following amounts is less: 1. capital cost of the property spread out over the life of the property; or 2. UCC of the property of that class at the end of the taxation year.
  • Class 14.1 - 5% (after December 31, 2016)
  • Property to be included in Class 14.1
    1. is goodwill;
    2. was eligible capital property of the taxpayer immediately before January 1, 2017 and is owned by the taxpayer at the beginning of that day; or
    3. is acquired after 2016, other than
      1. property that is tangible or, for civil law, corporeal property,
      2. property that is not acquired for the purpose of gaining or producing income from business,
      3. property in respect of which any amount is deductible (otherwise than as a result of being included in this class) in computing the taxpayer's income from the business,
      4. property in respect of which any amount is not deductible in computing the taxpayer's income from the business because of any provision of the Act (other than paragraph 18(1)(b)) or these Regulations,
      5. an interest in a trust,
      6. an interest in a partnership,
      7. a share, bond, debenture, mortgage, hypothecary claim, note, bill or other similar property, or
      8. property that is an interest in, or for civil law a right in, or a right to acquire, a property described in any of subparagraphs (i) to (vii).

    However, since there is only one Class 14.1 and this class is closely associated with the operation of the business, a terminal loss in regards to Class 14.1 can only be claimed if the business has ceased its operations (following a sale or a cessation of its activities). As a matter of fact, under paragraph 13(34)a) of the ITA, if a taxpayer carries on a particular business, there is deemed to be a single goodwill property in respect of the particular business.

    The presence of this goodwill will make it impossible to claim a terminal loss, since the class will not be empty.

    Moreover, ITA 20(16.1)c) provides that no terminal loss may be deducted in a taxation year in respect of property included in Class 14.1 of Schedule II of the Income Tax Regulations, except when the taxpayer has ceased to carry on the business to which this class relates.

    Chart - Comparison of tax rules applicable to eligible capital property before and after January 1, 2017
    Tax rules Before 2017 After 2016
    Definition Eligible capital property has a separate tax treatment from depreciable property. Eligible capital property is considered depreciable property.
    Acquisition of eligible capital property 3/4 of capital expenditure is added to the CEC account. 100% of capital expenditure is added to Class 14.1.
    Depreciation rate 7% of the CEC account. 5% of the UCC balance.
    Transitional rules for CEC account balances as of December 31, 2016.
    Half-year rule Not applicable. Applicable in the year of acquisition.
    Short fiscal year The expense is deductible in proportion to the number of days out of 365 in the taxation year. The expense is deductible in proportion to the number of days out of 365 in the taxation year.
    Disposition of eligible capital property Must deduct 3/4 of the proceeds of disposition from the CEC account. Must deduct from the UCC the lesser between the capital cost and the proceeds of disposition.
    Terminal loss Possible if the class is empty. Possible only if the business has ceased its operations.
    The CEC account balance (UCC) is negative following a disposition. Disposition results in business income.
    It is necessary to calculate the depreciation recovery which will be added to the business income.
    Disposition results in a capital gain.
    It is necessary to calculate the depreciation recovery which will be added to the business income.
    The CEC account balance (UCC) is positive following a disposition. Carry on the depreciation of the account balance. Carry on the depreciation of the account balance.
    Incorporation expenses 3/4 of the expense is added to the CEC account. The first $3,000 of these incorporation expenses are considered operating expenses, the difference is added to the UCC.

  • Class 15 SL
  • Woods assets are depreciated based on the number of cords or board feet cut in the taxation year compared to the undepreciated capital cost of the property. Enter the rate to be used in the Timber-Rate keyword in this group.
  • Class 16 - 40%
  • Taxis, vehicles you use in a daily car-rental business, coin-operated video games or pinball machines acquired after February 15, 1984, and freight trucks acquired after December 6, 1991, that are rated higher than 11,788 kilograms.
  • Class 17 - 8%
  • Roads, parking lots, sidewalks, airplane runways, storage areas, or similar surface construction.
  • Class 18 - 60%
  • Pre-May 26/76 motion picture films. In Quebec only, new transport truck acquired after March 30, 2010 with a gross weight of more than 11,788 kg.
  • Class 19 - 50% SL
  • Property otherwise included in Class 8 which was acquired between June 14, 1963 and December 31, 1966. The CCA rate is 20% on a declining balance basis for non-residents and 50% on a straight-line basis for Canadian-owned corporations.
  • Class 20 - 20% SL
  • Certified Class 1- or Class 3-type buildings acquired between June 12, 1963 and March 31, 1967 or approved capital costs under the Area Development Incentives Act.
  • Class 21 - 50% SL
  • Certified Class 8- or Class 19-type property acquired between June 12, 1963 and March 31, 1967 for use in a certified business or approved capital costs under the Area Development Incentives Act.
  • Class 22 - 50%
  • Most power-operated, movable equipment you bought before 1988 that you use for excavating, moving, placing, or compacting earth, rock, concrete, or asphalt.
  • Class 23 - 100%
  • Leasehold interests, licenses and buildings on or with respect to the Montreal or Vancouver Expo sites.
  • Class 24 - 50% SL
  • Pollution control equipment. The Ontario Current Cost Adjustment is available for purchases of Class 24 and 27 equipment made in or after 1992.
  • Class 25 - 100%
  • Pre-Oct.23/68 property acquired by Crown or municipally-owned corporations.
  • Class 26 - 5%
  • Catalysts and pre-May 22/79 deuterium-enriched water.
  • Class 27 - 50% SL
  • Pollution control equipment. The Ontario Current Cost Adjustment is available for purchases of Class 24 and 27 equipment made in or after 1992.
  • Class 28 - 30%
  • Pre-1988 mining equipment used for mine expansion and development.
  • Class 29 - 50% SL
  • Pre-1988 manufacturing or processing equipment. Post-1988 equipment should be included in Class 39 (pre-Feb.26/92) or Class 43 (post-Feb.25/92).
  • Class 30 - 40%
  • Pre-1988 telecommunications satellites or space crafts.
  • Class 31 - 5%
  • Class 31 and 32 pre-June 18/87 certified MURB buildings with a cost exceeding $50,000 should be entered in separate classes.
  • Class 32 - 10%
  • Class 31 and 32 pre-June 18/87 certified MURB buildings with a cost exceeding $50,000 should be entered in separate classes.
  • Class 33 - 15%
  • Timber resource property.
  • Class 34 - 50% SL
  • Certified energy conservation or energy-efficient equipment.
  • Class 35 - 7%
  • Railway cars.
  • Class 36 - 0%
  • Property acquired by virtue of a lease option agreement at a price less than fair market value when lease rental payments were previously deducted on the property. The excess of the deemed Adjusted Cost Base (see Fed.ITA 13(5.2)) over the purchase price is deemed to be CCA which was previously claimed on the property.

    No CCA can be claimed while the property is in Class 36 but recapture can occur on the property's disposal.

  • Class 37 - 15%
  • Amusement park land improvements, buildings and equipment.
  • Class 38 - 30%
  • Most power-operated, movable equipment you bought after 1987 and use for excavating, moving, placing, or compacting earth, rock, concrete, or asphalt.

    You can choose to keep an outdoor advertising sign and any property you would usually include in class 38 in a separate class. To do this, attach a letter to your income return for the year you bought the property. In the letter, list the properties you are including in a separate class.

  • Class 39 - 25% (prior to 02-26-92)
  • Manufacturing or processing equipment acquired after 1988 and before Feb.26/92. Use Class 43 if the equipment was acquired after Feb.25/92.

    C.C.A. for Class 39 is 35% in 1989, 30% in 1990 and 25% after 1990. DT Max will calculate a prorated CCA rate when the corporation's taxation year straddles the date on which the rate changed.

    The Ontario Current Cost Adjustment is available for purchases of Class 39 manufacturing & processing machinery and equipment made before Jan.1/92.

  • Class 40 - 30%
  • 1988-1990 acquired powered industrial lift trucks, rental portable tools and general-purpose electronic data processing equipment used in the manufacturing and processing of goods.
  • Class 41 - 25%
  • Pre-1987 mining operations-related machinery and equipment, gas or oil well equipment and heavy oil processing equipment.

    Most capital assets acquired by mining and oil and gas companies are included in Class 41, which qualifies for a depreciation rate of 25% on a declining balance basis. Class 41 includes:

    • All buildings, structures, machinery and equipment used in the extraction and processing (concentrating, smelting and refining) of a mineral resource that is not beyond the prime metal stage or its equivalent;
    • Motive equipment and railway facilities (excluding rolling stock) used to produce income from a mine;
    • Loading and unloading assets used at the mine or at the mineral processing facilities;
    • Electrical generating and distributing equipment used for mining;
    • Assets that provide services to the mine or to the community where a substantial portion of the persons employed at the mine reside (hospital, school, airport, fire hall, etc.).

    Accelerated Capital Cost Allowance (ACCA)
    The amount of ACCA that can be claimed in a year is equal to the balance of unclaimed capital cost in the class, but it cannot exceed the income of the mine. The amount claimed is optional in that any amount can be claimed up to the allowed maximum rate.

  • Class 41.1 - 25% (after March 18, 2007)
  • Oil sands property acquired after March 18, 2007 is generally included in new CCA Class 41.1.

    New subsection 1101(4e) prescribes a separate class for single mine properties that are included in paragraph (a) of Class 41.1. Properties included in paragraph (a) of new Class 41.1 remain eligible for the accelerated CCA until 2010.

    Beginning in 2011, the accelerated CCA is phased out and the amount of the additional allowance will be reduced each year, regardless of whether the constraint is the income from the mine or the amount of the undepreciated capital cost. The percentage allowed, as accelerated CCA, in each calendar year will be 90% in 2011, 80% in 2012, 60% in 2013 and 30% in 2014 of the amount otherwise allowable as accelerated CCA. No accelerated CCA will be allowed after 2014 and only the regular 25-per-cent CCA rate will apply after 2014.

    Under current rules, accelerated CCA is available in the form of an additional allowance which supplements the regular 25-per-cent CCA rate. It allows a taxpayer to deduct, in computing income for a taxation year, up to 100-per-cent of the undepreciated capital cost of the properties included in the separate Class 41, not exceeding the taxpayer's income for the year from the mine (calculated after deducting the regular CCA).

  • Class 41.2 - 25% (after March 20, 2013 & before 2021)
  • Class 41.2 (25 per cent CCA rate) includes property other than an oil sands property or eligible mine development property,

    (a) that is acquired by a taxpayer after March 20, 2013 and before 2021 and that, if acquired on March 20, 2013, would be included in paragraph (a) or (a.1) of Class 41; or

    (b) that is acquired by a taxpayer after 2020 and that, if acquired on March 20, 2013, would be included in paragraph (a) or (a.1) of Class 41.

    These separate classes of properties remain eligible for the full accelerated CCA until 2016. Beginning with 2017, accelerated CCA is phased out and the amount of the additional allowance will be reduced each year, regardless of whether the constraint is the level of project income or the amount of the undepreciated capital cost. The percentage allowed, as accelerated CCA, in each calendar year will be 90% for 2017, 80% for 2018, 60% for 2019 and 30% for 2020 of the amount otherwise allowable as accelerated CCA. No accelerated CCA will be allowed and only the regular 25% CCA rate will apply for assets in this Class after 2020.

    Eligible mine development property acquired after March 20, 2013 and before 2018 can be included in Class 41.

  • Class 42 - 12%
  • Fibre optic cables.
  • Class 43 - 30%
  • Manufacturing or processing equipment acquired after Feb.25/92.
  • Class 43.1 - 30%
  • Includes prescribed energy conservation property (CRCE). This class is broadened to include biogas production equipment and distribution equipment acquired on or after February 23, 2005.
  • Class 43.2 - 50%
  • Includes certain high-efficiency cogeneration systems and renewable energy generation equipment acquired on or after February 23, 2005, and before 2025. This accelerated CCA rate will also apply to biogas production equipment and distribution equipment used in district energy systems that rely on efficient cogeneration, acquired on or after February 23, 2005, and before 2025.
  • Class 44 - 25%
  • Patents and rights to use patented information.
  • Class 45 - 45%
  • General-purpose electronic data processing equipment and certain ancillary property acquired after March 22, 2004, other than property that is acquired before 2005 in respect of which a taxpayer elects to have the property included in a separated Class 10.
  • Class 46 - 30%
  • Data network infrastructure equipment and systems software for that equipment acquired after March 22, 2004 that would otherwise be included in Class 8 because of the default provision in paragraph (i) of that Class. For details on the definition of data network infrastructure equipment, see the note accompanying that new definition in amended subsection 1104(2) of the Regulations.
  • Class 47 - 8%
  • Includes transmission and distribution equipment and structures (excluding buildings) of a distributor of electrical energy acquired on or after February 23, 2005.
  • Class 47 - 30% (LNG after February 19, 2015)
  • Accelerated CCA for liquefied natural gas (LNG) after February 19, 2015 and before 2025.

    Eligible property used for the liquefaction of natural gas are eligible for a CCA rate of 8% plus the lesser of 22% and income from eligible liquefaction activities attributable to that facility.

  • Class 48 - 15%
  • Includes combustion turbines that generate electricity (including associated burners and compressors) for property acquired on or after February 23, 2005. A separate class election (presently available for such equipment eligible for the 8% rate) is eliminated for equipment eligible for the 15% CCA rate (class 48).
  • Class 49 - 8%
  • Includes transmission pipelines for petroleum, natural gas, or related hydrocarbons, including control and monitoring devices, valves, and other ancillary equipment. The 8% CCA rate for transmission pipelines will apply to equipment acquired on or after February 23, 2005. A separate class election is generally available for eligible equipment acquired on or after February 23, 2005.
  • Class 50 - 55% (after March 18, 2007)
  • Computer equipment and systems software acquired after March 18, 2007.
  • Class 51 - 6% (after March 18, 2007)
  • Natural gas distribution pipelines acquired after March 18, 2007. Natural gas distribution pipelines are pipelines through which natural gas is carried from transmission pipelines to consumers. They include both distribution mains, which run to the edge of a customer's property, and service lines, which run from the edge of the customer's property to the house or building.
  • Class 52 - 100% (after 27 Jan. 2009 & bef. Feb. 2011)
  • Include in Class 52 with a CCA rate of 100% (with no half-year rule) general-purpose electronic data-processing equipment (commonly called computer hardware) and systems software for that equipment, including ancillary data-processing equipment, if acquired after January 27, 2009, and before February 2011. To qualify for this rate, the asset must also:
    • be situated in Canada;
    • not have been used, or acquired for use, for any purpose before it is acquired by the taxpayer; and
    • be acquired by the taxpayer:
      • for use in a business carried on by the taxpayer in Canada or for the purposes of earning income from property situated in Canada; or
      • for lease by the taxpayer to a lessee for use by the lessee in a business carried on by the lessee in Canada or for the purpose of earning income from property situated in Canada.
  • Class 53 - 50% (after 31 Dec. 2015 & before 2026)
  • Class 53 includes machinery and equipment used in Canadian manufacturing acquired after 2015 and before 2026.
  • Class 54 - 30% (after 18 Mar. 2019 & before 2028)
  • Class 54 was created for zero-emission vehicles acquired after March 18, 2019 that would otherwise be included in Class 10 or 10.1, with the same CCA rate of 30%.

    There is a limit of $55,000 (plus federal and provincial sales taxes), for 2019, on the capital cost for each zero-emission passenger vehicle in Class 54. The limit will be reviewed annually. Class 54 may include both zero-emission passenger vehicles that do and do not exceed the prescribed threshold. However, unlike Class 10.1, Class 54 does not establish a separate class for each vehicle whose cost exceeds the threshold.

    If a zero-emission passenger vehicle is disposed of to a person or partnership with whom you deal at arm's length, and its cost exceeds the prescribed amount, the proceeds of disposition will be adjusted based on a factor equal to the prescribed amount as a proportion of the actual cost of the vehicle. For dispositions made after July 29, 2019, based on proposed legislation, the actual cost of the vehicle will also be adjusted for the payment or repayment of government assistance.

    The enhanced first-year allowance will be calculated by: :

    • 100% after March 18, 2019, and before 2024
    • 75% after 2023 and before 2026
    • 55% after 2025 and before 2028

    The enhanced first-year allowance will be calculated by :

    • increasing the net capital cost addition to the new class for property that becomes available for use before 2028, and applying the prescribed CCA rate for the class as described below :
      • Applying the prescribed CCA rate of 30% to :
        • 2 1/3 times the net addition to the class for property that becomes available for use before 2024
        • 1 1/2 times the net addition to the class for property that becomes available for use in 2024 or 2025
        • 5/6 times the net addition to the class for property that becomes available for use after 2025 and before 2028
    • suspending the existing CCA half-year rule
  • Class 55 - 40% (after 18 Mar. 2019 & before 2028)
  • Class 55 was created for zero-emission vehicles acquired after March 18, 2019 otherwise included in Class 16, with the same CCA rate of 40%.

    The enhanced first-year allowance will be calculated by: :

    • 100% after March 18, 2019, and before 2024
    • 75% after 2023 and before 2026
    • 55% after 2025 and before 2028

    The enhanced first-year allowance will be calculated by :

    • increasing the net capital cost addition to the new class for property that becomes available for use before 2028, and applying the prescribed CCA rate for the class as described below :
      • Applying the prescribed CCA rate of 40% to :
        • 1 1/2 times the net addition to the class for property that becomes available for use before 2024
        • 7/8 times the net addition to the class for property that becomes available for use in 2024 or 2025
        • 3/8 times the net addition to the class for property that becomes available for use after 2025 and before 2028
    • suspending the existing CCA half-year rule
  • Class 56 - 30% (after 1 Mar. 2020 & before 2028)
  • Class 56 includes a temporary enhanced first-year CCA rate of 100% in respect of eligible zero-emission automotive equipment and vehicles that currently do not benefit from the accelerated rate provided by Classes 54 and 55. These vehicles and equipment would be included in new Class 56.

    To be eligible for this first-year enhanced allowance, a vehicle or equipment must be automotive (i.e., self-propelled) and fully electric or powered by hydrogen. Vehicles or equipment that are powered partially by electricity or hydrogen (which includes hybrid vehicles and vehicles that require human or animal power for propulsion) would not be eligible.

    Class 56 would apply to eligible zero-emission automotive equipment and vehicles that are acquired on or after March 2, 2020 and that become available for use before 2028, subject to a phase-out for equipment and vehicles that become available for use after 2023. A taxpayer would be able to claim the enhanced allowance in respect of an eligible zero-emission automotive equipment or vehicle only for the taxation year in which the vehicle first becomes available for use.

    For taxation years 2020 to 2023 : rate = 100%
    For taxation years 2024 to 2025 : rate = 75%
    For taxation years 2026 to 2027 : rate = 55%
    For taxation years 2028 and following : N/A

    CCA would be deductible on any remaining balances in Class 56 on a declining-balance basis at a rate of 30%. An election would be available to forgo Class 56 treatment and instead include property in the Class in which it would otherwise be eligible.

  • Class 57 - 8% (after 31 Dec. 2021 & before 2041)
  • Use this option to enter a property that is part of a CCUS project of a taxpayer and that is
    • (a) equipment that is not required for hydrogen production, natural gas processing or acid gas injection and that
      • (i) is to be used solely for capturing carbon dioxide
        • (A) that would otherwise be released into the atmosphere, or
        • (B) directly from the ambient air,
      • (ii) prepares or compresses captured carbon for transportation, or,
      • (iii) is power or heat production equipment that solely supports the CCUS process,

    • (b) equipment that is to be used solely for transportation of captured carbon,
    • (c) equipment that is to be used solely for storage of captured carbon in a geological formation (other than for enhanced oil recovery),
    • (d) monitoring and control equipment that is to be used solely for the functioning of any equipment described in paragraphs (a) to (c),
    • (e) a building or other structure all or substantially all of which is used, or to be used, for the installation or operation of equipment described in paragraphs (a) to (d), or
    • (f) property that is used solely to
      • (i) convert another property that would not otherwise be described in any of paragraphs (a) to (e) if the conversion causes the other property to satisfy the description under any of paragraphs (a) to (e), or
      • (ii) refurbish property described in any of paragraphs (a) to (e).
  • Class 58 - 20% (after 31 Dec. 2021 & before 2041)
  • Use this option to enter a property that is part of a CCUS project of a taxpayer, and that is
    • (a) equipment to be used solely for using carbon dioxide in industrial production (including for enhanced oil recovery),
    • (b) monitoring and control equipment to be used solely for the functioning of equipment included in paragraph (a),
    • (c) a building or other structure all or substantially all of which is used, or to be used, for the installation or operation of equipment described in paragraph (a) or (b), or
    • (d) property that is used solely to
      • ÿ
      • (i) convert another property that would not otherwise be described in any of paragraphs (a) to (e) if the conversion causes the other property to satisfy the description under any of paragraphs (a) to (c), or
      • (ii) refurbish property described in any of paragraphs (a) to (c).
  • Class 59 - 100% (after 31 Dec. 2021 & before 2041)
  • Use this option to enter a property that is an expenditure incurred by the taxpayer after 2021 and that is
    • (a) for the purpose of determining the existence, location, extent or quality of a geological formation to permanently store captured carbon (other than for enhanced oil recovery) in Canada, including such an expense that is
      • (i) a geological, geophysical or geochemical expense, or
      • (ii) an expense for environmental studies or community consultations, including studies or consultations that are undertaken to obtain a right, licence or privilege for the purpose of determining the existence, location, extent or quality of a geological formation to permanently store captured carbon (other than for enhanced oil recovery); and
    • (b) an expense other than an expense
      • (i) incurred in drilling or completing an oil or gas well or in building a temporary access road to, or preparing a site in respect of, any such well, or
      • (ii) described in Class 60.
  • Class 60 - 30% (after 31 Dec. 2021 & before 2041)
  • Use this option to enter a property that is an expenditure incurred after 2021 by the taxpayer in
    • (a) drilling or converting a well in Canada for the permanent storage of captured carbon (other than for enhanced oil recovery),
    • (b) drilling or completing a well for the permanent storage of captured carbon (other than for enhanced oil recovery) in Canada, building a temporary access road to the well or preparing a site in respect of the well, or
    • (c) drilling or converting a well in Canada for the purposes of monitoring pressure changes or other phenomena in captured carbon permanently stored in a geological formation (other than for enhanced oil recovery).
  • Timber limits and cutting rights
  • Use this option to enter a timber limit or a right to cut timber from a limit. The allowance (CCA) is generally established on the basis of the quantity of timber cut in the year versus the quantity of timber which the taxpayer has a right to cut. The CRA discusses this deduction and provides guidelines with respect to the tax treatment of timber limits in Interpretation Bulletin IT-481 (Consolidated).

    Rate: Depletion allowance applies. Enter the rate to be used in the Timber-Rate keyword in this group.

Secondary keywordSFD-$-OV.c

Efile override of SFD fields (dollars only).

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

Secondary keywordSFD-Num-OV.c

Efile override of SFD fields (numeric only).

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)
Line 21700 - Business investment loss - Allowable deduction

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains
Line 22100 - Carrying charges, interest expenses, and other expenses

CapGain-Ded

If your client is entitled to a capital gain deduction on eligible capital gains and you wish to limit or override the capital gain deduction reported on line 25400 of the federal income tax return and line 292 of the Quebec income tax return, use CapGain-Ded to enter the amount of the capital gain deduction and indicate the type of gain eligible for the deduction.

The following options are applicable for the keyword CapGain-Ded.

  • Capital gains deduction - Federal
  • Capital gains deduction - Quebec

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 25400 - Capital gains deduction

Secondary keywordExemptLimit

Enter the amount for the capital gain deduction with ExemptLimit. DT Max will report this amount on line 25400 of the federal income tax return and line 292 of the Quebec income tax return. For more information on capital gains see Capital-Gains .

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 25400 - Capital gains deduction

Cap-Reserves

DT Max will automatically bring into income any capital gains reserves created in respect of capital dispositions of previous 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.

You can claim a reserve up to a maximum of {b}four years{/b} for all property (other than family farm or fishing property, and small business corporation shares disposed to your child, as well as donated non-qualifying securities).

You can claim a reserve up to a maximum of {b}nine years{/b} for family farm property, family fishing property, and small business corporation shares disposed to your child.

See also Capital-Gains, At-Opening, At-YearEnd .

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

  • Qualified farm property (5 or 10 years)
  • Part 1 - Dispositions of capital property after November 12, 1981
    A. Dispositions of qualified farm property (QFP)
    Form T2017 line 66815, 66840, 66843 and 66844:

    In 2023, the opening balance for the amount of 2022 reserve for dispositions of QFP to your child after 2013 and before April 21, 2015 (line 66840 of Form T2017 for 2022).

    In 2023, the opening balance for the amount of 2022 reserve for dispositions of QFP to your child after April 20, 2015, and all other dispositions of QFFP after 2022 (line 66844 of Form T2017 for 2022).

    You can claim a reserve up to a maximum of four years for all property (other than family farm or fishing property, and small business corporation shares disposed to your child, as well as donated non-qualifying securities)

  • Qualified fishing property (5 or 10 years)
  • Part 1 - Dispositions of capital property after November 12, 1981
    A. Dispositions of qualified fishing property (QXP)
    Form T2017 line 66815 and 66840:

    In 2023, the opening balance for the amount of 2022 reserve for dispositions of QXP to your child after 2013 and before April 21, 2015 (line 66840 of Form T2017 for 2022).

    In 2023, the opening balance for the amount of 2022 reserve for dispositions of QXP to your child after April 20, 2015, and all other dispositions of QFFP after 2022 (line 66844 of Form T2017 for 2022).

  • Qualified small business corporation shares (5 or 10 years)
  • Part 1 - Dispositions of capital property after November 12, 1981
    B. Dispositions of of qualified small business corporation shares (QSBCS)
    Form T2017 line 66883 and 66850:

    In 2023, the opening balance for the amount of 2022 reserve for dispositions of QSBCS to your child after 2013 and all other dispositions of QSBCS after 2022 (line 66850 of Form T2017 for 2022).

  • Property sold to your child other than QFFP/QSBCS (10 yrs)
  • Part 1 - Dispositions of capital property after November 12, 1981
    C.Dispositions of property (other than QFP, QXP, and QSBCS) to your child Form T2017 line 66910 and 66920:

    In 2023, the opening balance for the amount of 2022 reserve for dispositions to your child after 2013, of family farm property other than QFP and shares of capital stock of a small business corporation other than QSBCS; or after May 1, 2006, of family fishing property other than QXP (from line 66920 of form T2017 for 2022).

  • Other property (5 years)
  • Part 1 - Dispositions of capital property after November 12, 1981
    D.Dispositions of property other than dispositions described in A, B, and C above Form T2017 line 66960 and 66990:

    In 2023, the opening balance for the amount of 2022 reserve for dispositions of property after 2018 other than dispositions listed on lines 66815, 66883, and 66910 (from line 66990 of form T2017 for 2022).

  • Dispositions of capital property before November 13, 1981
  • Part 2 - Dispositions of capital property before November 13, 1981
    Form T2017 line 67030:

    In 2023, the opening balance for the amount of 2022 reserve for dispositions before November 13, 1981 (from line 67040 of form T2017 for 2022).

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains

Secondary keywordProperty-Descript

Description of the property disposed.

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains

Secondary keywordReserve-BeginDate

As the lifetime capital gains exemption on qualified capital gains increased in 2014 to $800,000 and will be indexed to inflation in following years, the date on which the reserve was taken is required in order to apply it to the correct exemption amount.

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains

Secondary keywordType.res

Enter the type of capital property.

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

  • QFP - mortgage foreclosures/cond. sales rep.
  • Other

  See the Taxnet Pro™ T1 Line-by-Line Guide (subscription required):
Line 12700 - Taxable capital gains (Schedule 3)

  See the CRA's general income tax guide:
Line 12700 - Taxable capital gains

Secondary keywordAt-Opening  ALT-J 

Enter the amount in the capital gains reserves account at the opening of the current taxation year for the dispositions in the year being entered. This field is updated automatically by DT Max for the following year. (See Cap-Reserves .) Use [Alt-J] to enter different values for other jurisdictions.

Secondary keywordAt-YearEnd  ALT-J 

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 entered. (See Cap-Reserves .) Use [Alt-J] to enter different values for other jurisdictions.