To calculate your overall capital gain or loss, use a worksheet set up in the same format as the Schedule 3 and calculate the gain or loss on each set of company shares sold. You will need to know the number of shares, date of purchase, proceeds of disposition, adjusted cost base, and outlays and expenses associated with each company transaction. You also need to calculate the average cost of identical shares bought at different prices and on different dates.

On Schedule 3, complete section 3, "Publicly traded shares, mutual fund units, deferral of eligible small business corporation shares, and other shares". Make sure you complete lines 131 and 132 with the totals from your worksheet. For more information, see How do you calculate your capital gains and capital losses.

When you keep a treasury bill (T-bill) 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 you. However, if you sell the T-bill before it matures, you may have a capital gain or loss in addition to the interest accrued at that time.

Before you calculate your capital gain or loss, you have to determine the amount of interest accumulated to the date of disposition. Interest to be included in income:

(Purchase price x Effective yield rate) x (Number of days held divided by Number of days in year sold)

Subtract the interest from the proceeds of disposition and calculate the capital gain or loss in the usual way.

Report the interest in Part II of Schedule 4 and on line 121 of your tax return.

Report the capital gain in section 5 of your Schedule 3. Make sure you complete lines 151 and 153 with the totals. At line 199 on Schedule 3, calculate the taxable portion and report any gain at line 127. If the result is negative, do not report it on line 127. We will record the loss and notify you on your notice of assessment. For more information and an example, see Treasury bills (T-bills) and stripped bonds.

You have to calculate the average cost of each share at the time of the split to determine your new adjusted cost base. The average cost is calculated by dividing the total cost of the shares purchased (this is usually the cost of the shares plus any expenses involved in acquiring them), by the total number of shares owned.

Report the sale of the shares in the appropriate section of your Schedule 3. At line 199 on Schedule 3, calculate the taxable portion and report any gain at line 127. If the result is negative, do not report it on line 127. We will record the loss and notify you on your notice of assessment. For more information and examples, see Stock splits and consolidations.

If you give capital property to:

• your spouse or common-law partner,
• a spousal or common-law partner trust,
• a joint spousal or common-law partner trust, or
• an alter ego trust,

you generally do not have a capital gain or loss at that time. For definitions of these trusts, see the T4013, T3 - Trust Guide.

At the time you give the gift, depending on the type of property you give, you are considered to receive an amount equal to:

• the undepreciated capital cost for depreciable property; or
• the adjusted cost base for other types of capital property.

Your spouse or common-law partner, or the trust for your spouse or common-law partner or for yourself, is considered to have bought the capital property for the same amount that you are considered to have sold it for.

For more information, see Transfers of property to a spouse or common-law partner or to a trust for a spouse or common-law partner.

Demutualization is a process of conversion of a life insurance company from a mutual company owned by policyholders, to a shareholder-owned company. Under this process, shares, cash, or other benefits are given to eligible policyholders. We have developed the following questions and answers to help you understand the tax consequences of receiving a demutualization benefit. For more information, see Questions and Answers about Demutualization.