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Calculating the capital gains deferralThe capital gains deferral is available for the disposition of eligible small business corporation shares made in 2005. The investment can be made by an individual in any particular corporation (or related group). The permitted deferral of the capital gain from the disposition of eligible small business corporation shares is determined by the following formula: Capital gains deferral = B × (D ÷ E) For dispositions in 2005, report the total capital gain on lines 131 and 132 of Schedule 3 and the capital gains deferral on line 161 of Schedule 3. The capital gain you must report in the year of disposition will be determined by subtracting the capital gain deferral from the total capital gain realized from the disposition. Note Adjusted cost base (ACB) reduction ACB reduction = F × (G ÷ H) Completing your schedule 3Report capital gains deferral on line 161 of Schedule 3. If you elect to defer the capital gains that resulted from the disposition of qualified small business corporation shares, report such disposition on lines 131 and 132 of Schedule 3. Forms and publicationsRelated topics |
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