- Dispositions (sale or transfer) of qualified farm or fishing property (if you disposed of them in 2018)
- Dispositions of qualified small business corporation shares (if you disposed of them in 2018), or
- Reserves added to your 2018 income, from dispositions made in a previous year
*For the purposes of the capital gains deduction, the Canada Revenue Agency (CRA) considers you to be a Canadian resident if you lived in Canada for part of 2018 and throughout 2017 or 2019. If you were a non-resident when you disposed the above properties, you can’t claim the capital gains deduction.
When you dispose of any of the above properties (in other words, when you sell or transfer it to someone else), and have a capital gain, you can claim a capital gains deduction that’s equal to the lowest of the following amounts:
- Your capital gains limit for the year
- Your cumulative capital gains limit for the year
- The net taxable capital gains that you reported in 2018 from the disposition of qualified farm or fishing property or qualified small business corporation shares or
- Your maximum capital gains deduction available for the year
If you need more information, check out the “Claiming a capital gains deduction” section of Guide T4037, Capital Gains.
Lifetime capital gains exemption (LCGE)
If, in 2018, you disposed of qualified property, you’re entitled to a cumulative lifetime capital gains exemption (LCGE) on your net gains.
For 2018, the LCGE on disposition of qualified small business corporation shares is $848,252, and if you disposed of a qualified farm or fishing property, you’re entitled to a LCGE of $1,000,000. In either case, the maximum capital gains deduction you can make in any given year is half of your LCGE amount.
I am a Québec resident
If you want to calculate your capital gains deduction on qualified property, you’ll need to complete the TP-726.7-V: Capital Gains Deduction on Qualified Property form. Qualified property includes:
- Qualified farm or fishing property disposed of in 2018
- Qualified small business corporation shares in 2018
- Reserves added to your 2018 income due to any of the above dispositions
If you disposed of resource property (such as, flow-through shares), complete the TP-726.20.2-V: Capital Gains Deduction on Resource Property form to find out if you can claim a deduction (and to calculate the amount of the deduction, if applicable).
For more information on claiming your capital gains deduction, refer to the Revenu Québec website.
Where do I claim this?
Follow these steps in H&R Block’s 2018 tax software:
- On the PREPARE tab, click the IN THIS SECTION icon.
- In the Investments box, click the Add This Topic button.
- Click the PENSION PLANS AND INVESTMENTS icon. You will find yourself here:
- Under the BOUGHT/SOLD SECURITIES OR OTHER PROPERTY heading, select the checkbox labelled, Calculation of capital gains deduction (T657), then click Continue.
- When you arrive at the Calculation of capital gains deduction (T657) page, enter your information into the tax software.