Disposing of eligible capital property

If you disposed of eligible capital property that is qualified farm or fishing property, you may be able to claim the capital gains deduction.

For details on how to report the disposition of this type of property and what amounts are eligible for the capital gains deduction, see Qualified farm and fishing property.

Election on dispositions of eligible capital property

Eligible capital property is intangible and neither qualifies for capital cost allowance nor is fully deductible in the year of its acquisition as a current expense. However, you may have deducted part of its cost each year in the form of an annual allowance, and kept track of the property in your cumulative eligible capital (CEC) account.

If you disposed of property from your CEC account, you may qualify to make 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.

For details on how to calculate the capital gain as well as the conditions that must be met in order to qualify to make this election, see the chapter called "Eligible Capital Expenditures" in one of the following guides:

• Guide T4002, Business and Professional Income
• Guide T4003, Farming and Fishing Income
• RC4060, Farming Income and the AgriStability and AgriInvest Programs Guide
• RC4408, Farming Income and the AgriStability and AgriInvest Programs Harmonized Guide

Forms and publications

• Guide T4037, Capital Gains

Related topics

• Qualified farm and fishing property

Date modified:

2017-01-03