Capital gains and losses – farmers and fishers

You have a capital gain when you sell, or are considered to have sold, a capital property for more than its adjusted cost base plus the expenses or outlays you incurred to sell the property. Not all of your capital gain is taxable. You have to include your taxable capital gain in your income.

You have a capital loss when you sell, or are considered to have sold, a non-depreciable capital property for less than its adjusted cost base plus the expenses or outlays you incurred to sell the property. Not all of your capital loss is deductible. You can only deduct an allowable capital loss from a taxable capital gain.

For more information on capital gains and losses, go to Line 12700 – Taxable capital gains^{Footnote 1}. You can also go to Chapter 6 of Guide T4002, Self-employed Business, Professional, Commission, Farming, and Fishing Income.

Qualified farm or fishing property

If you have a taxable capital gain from the sale of qualified farm or fishing property (QFFP), you may be able to claim a capital gains deduction.

QFFP is property owned by you or your spouse or common-law partner. It can also be property owned by a family-farm or family-fishing partnership in which you or your spouse or common-law partner holds an interest. QFFP includes:

• a real property, such as land and buildings
• a fishing vessel that was used in the course of carrying on a fishing business
• a share of the capital stock of a family-farm or family-fishing corporation you or your spouse or common-law partner owns
• an interest in a family-farm or family-fishing partnership that you or your spouse or common-law partner owns
• a property included in Class 14.1 used in the course of carrying on a farming or fishing business in Canada, such as:
  • milk and egg quotas for farmers
  • fishing permits or licenses with an unlimited period

Real property or property included in Class 14.1

Real property or property included in Class 14.1 is QFFP only if it is used to carry on a farming or fishing business in Canada by any of the following:

• you, your spouse or common-law partner, or any of your parents or your children
• the beneficiary of a personal trust, or the spouse or common-law partner, parent or child of such a beneficiary
• a family-farm or family-fishing corporation where any of the above persons owns a share of the corporation
• a family-farm or family-fishing partnership where any of the above persons (except a family-farm or family-fishing corporation) owns an interest in the partnership

For more information on QFFP, real property and eligible capital property, go to Chapter 6 of Guide T4002, Self-employed Business, Professional, Commission, Farming, and Fishing Income.

Transfer of farm or fishing property

You may be able to delay paying tax on any taxable capital gain and any recapture of capital cost allowance. You can do this when you transfer your Canadian farm or fishing property to your child or your spouse or common-law partner.

For more information on transfers of farm or fishing property, go to Chapter 6 of Guide T4002, Self-employed Business, Professional, Commission, Farming, and Fishing Income.

Forms and publications

• Guide T4037, Capital Gains

Related links

• Capital gains
• Capital losses and deductions