Line 127 - Taxable capital gains

A capital gain or a capital loss usually occurs when you sell or dispose of property, such as real estate or shares. The taxable part of a capital gain is 75% of the net amount of your capital gains minus your capital losses for the year.

If you realized a capital gain as a result of a mortgage foreclosure or conditional sales repossession, do not include the capital gain in income when calculating your GST/HST credit, Canada Child Tax Benefit payments, age amount (line 301), social benefits repayment (line 235), and refundable medical expense supplement (line 452). If this applies to you, contact us for more details.

When you donate capital property to a charity, we consider you to have sold the property at its fair market value. As a result, you may have to report a capital gain or loss for that property. There are special rules for donations of certain property. For details, get the guide called Capital Gains and the pamphlet called Gifts and Income Tax.

How to report

Use Schedule 3 to calculate your taxable capital gains or allowable capital losses and attach the completed schedule to your paper return. Generally, if all of your gains or losses are shown on T3, T4PS, T5, or T5013 slips, or on a financial statement from a partnership, enter the total on line 174 of Schedule 3. If your securities transactions are shown on an account statement or a T5008 slip, use the information on these documents to help you complete Schedule 3. For more information about these and other capital dispositions, get the guide called Capital Gains.

If you have a taxable capital gain, enter the amount from line 199 on Schedule 3 on line 127 of your return. If you have a net capital loss, do not claim the loss on line 127 of your return. We will register in our system the loss you show on line 199 of Schedule 3. You can then use it to reduce your taxable capital gains of other years. The "Note" at line 253 explains how to do this.

Tax Tip
You may be able to claim a deduction for the taxable capital gain you report. See line 254 for details.