Which gains are eligible?

The capital gains deduction can only be claimed against taxable capital gains you have in 2005 if the gains arise from:

• dispositions of qualified farm property;
• dispositions of qualified small business corporation shares; and
• a reserve brought into income in 2005, from either of the above.

The capital gains deduction cannot be applied to taxable capital gains arising from dispositions of publicly traded shares and mutual funds, or other gains that are reported in sections 3 to 8 of Schedule 3.

If you disposed the above properties while you were a non-resident of Canada, the capital gains are not eligible for the capital gains deduction.

Note

Deferred capital gains on the disposition of qualified small business
corporation shares do not qualify for the capital gains deduction.

Forms and publications

• Form T657, Calculation of Capital Gains Deduction for 2005
• Form T936, Calculation of Cumulative Net Investment Loss (CNIL) to December 31, 2005

Related topics

• Qualified Farm Property
• Qualified Small Business Corporation Shares