Election to treat the disposition of an eligible capital property as a capital gain

Under certain conditions, you can elect to treat the disposition of an eligible capital property (other than goodwill) as a regular capital gain. For example, properties such as a franchise, concession, or licence that has an unlimited life may qualify for this election.

By electing, you deem to remove the property from your cumulative eligible capital (CEC) account for proceeds equal to its original cost.

You can then declare a capital gain equal to your actual proceeds of disposition minus the cost of acquisition.

Report the details on the "Real estate, depreciable property and other properties" line of Schedule 3, Capital Gains (or Losses).

This election will benefit you if you have unused capital losses to apply against the capital gain.

The election is available if you meet the following conditions:

• you disposed of an eligible capital property other than goodwill;
• the cost of the eligible capital property can be determined;
• the proceeds of disposition exceed the cost; and
• you do not have an exempt gains balance.

File your election by attaching a note to your paper income tax return or send it to your Tax services office or tax centre. Be sure to include your name, address and social insurance number so we can correctly identify your election.

Forms and Publications

• Guide T4002, Business and Professional Income
• Guide T4037, Capital Gains
• Schedule 3, Capital Gains (or Losses)

Related topics

• Tax services offices and tax centres - Addresses, office hours, and fax numbers

Date modified:

2016-01-05