Plain meaning
A gain that may arise when a capital property is sold or otherwise disposed of for more than its adjusted cost base.
Also called
taxable capital gains
taxable capital gain
capital gain
Key points
- A capital gain generally arises when proceeds of disposition exceed the adjusted cost base and selling costs of a capital property.
- Only the taxable portion of a capital gain is included in income, based on the capital gains inclusion rate in force for the taxpayer and period.
- Capital losses generally offset capital gains, but their use is subject to timing and category rules.
- Special rules can apply to principal residences, qualified small business corporation shares, farm or fishing property, and transfers between related persons.
- Budget announcements and implementation bills can affect both inclusion rates and exemptions, so effective dates matter.
Why it comes up
Capital gains rules affect investors, cottages, rental properties, business sales, trusts, and corporations.