Capital Gains — Canadian Taxation
A capital gain is the profit realized when selling an investment at a price above its Adjusted Cost Base (ACB). In Canada, only 50% of the gain is taxable (inclusion rate), making it one of the most powerful tax advantages.
Formula
Capital Gain = Sale Price - ACB - Fees (commissions)
Taxable Gain = Capital Gain × 50%
Example
- Buy: 100 shares @ $50 = ACB $5,000
- Sell: 100 shares @ $80 = $8,000 - $5 commission = $7,995
- Gain: $2,995
- Taxable: $2,995 × 50% = $1,497.50
- Tax (35% marginal): $524 → effective rate on gain ≈ 17.5%
Capital Losses
Capital losses are deductible from your capital gains for the year. If losses > gains, balance carries forward indefinitely (and 3 years back).
Superficial Loss Rule
Selling at a loss then repurchasing the same security within 30 days = loss denied by CRA. Added to repurchase ACB.
By Account
- TFSA: gains 100% tax-free — no reporting
- RRSP: gains not taxable inside (but withdrawal taxed as income)
- Non-registered: gains taxable at 50% of marginal rate — best vehicle for buy-and-hold strategy
Frequently Asked Questions
Will the 50% inclusion rate change?
Budget 2024 proposed 66.67% beyond $250,000/year, but the measure is debated. Check recent CRA announcements.
Are capital losses always deductible?
Yes, but only against capital gains (not ordinary income). Balance carries forward indefinitely.
Do I report TFSA gains?
No. TFSA gains are 100% tax-free and not reported.
What's the superficial loss window?
30 days before or after the sale. Total 61-day window around the sale.
🌐 Version française: /glossaire/gains-en-capital/