Line 25400 – Capital gains deduction

• Tax year: 2024
• Return type: Personal income tax and benefit return

If you have a capital gain on the sale of certain properties, you may be able to claim an amount for the capital gains deduction, and may be able to reduce your taxable income.

What's new for capital gains

What is a capital gains deduction

It is a deduction that you can claim against taxable capital gains you realized from the disposition of certain capital properties. You can reduce your taxable income by claiming this deduction at line 25400 of your return.

Who can claim

Start of question

Resident of Canada throughout 2024

For the purpose of this deduction, the Canada Revenue Agency (CRA) will also consider you to be a resident throughout 2024 if you meet both of the following conditions:

• You were a resident of Canada for at least part of 2024
• You were a resident of Canada throughout 2023 or 2025

Residents of Canada include factual and deemed residents. To get help with determining your residency status, go to Determining your residency status.

What capital gains are eligible for the capital gains deductions

You may be able to claim the capital gains deduction on taxable capital gains you have in 2024 from any of the following:

• dispositions of qualified small business corporation shares (QSBCS) 
• dispositions of qualified farm or fishing property (QFFP) 
• a reserve brought into income in 2024 from either of the above
•  
• the allocation and designation by a trust of taxable capital gains reported in the trust's tax year on the disposition of QSBCS or QFFP
• the allocation and designation by a trust of taxable capital gains resulting from a reserve brought into income in the trust's tax year relating to a disposition of QSBCS or QFFP in a prior tax year of the trust

What is the capital gains deduction limit

The lifetime capital gains exemption (LCGE) depends on when you disposed of qualifying property in 2024. The LCGE is:

• $1,016,836 for dispositions before June 25, 2024 (Period 1)
• under proposed changes, $1,250,000 for dispositions after June 24, 2024 (Period 2)

This means that the maximum capital gains deduction for qualifying properties is:

• $508,418 (50% of $1,016,836) for Period 1
• $625,000 (50% of $1,250,000 ) for Period 2

Previous years

• 2015 to 2023

  Capital gains deduction limits on dispositions of qualifying capital property for 2015 to 2023

  Year	Lifetime capital gains limit
  2023	$485,595 (50% of $917,190)
  2022	$456,815 (50% of $913,630)
  2021	$446,109 (50% of $892,218)
  2020	$441,692 (50% of $883,384)
  2019	$433,456 (50% of $866,912)
  2018	$424,126 (50% of $848,252)
  2017	$417,858 (50% of $835,716)
  2016	$412,088 (50% of $824,176)
  2015	$406,800 (50% of $813,600)

How to claim

Complete Form T657, Calculation of Capital Gains Deduction, to calculate your capital gains deduction. If you have investment income or investment expenses in any years from 1988 to 2024, you must also complete Form T936, Calculation of Cumulative Net Investment Loss (CNIL) to December 31, 2024.

If you are including a taxable capital gain in your income resulting from a reserve that relates to a disposition in a prior year of capital property that is QSBCS or QFFP, the amount of the capital gains deduction that you can claim is based on the year that the property was disposed of. This also applies to any taxable capital gain allocated and designated to you, by a trust which had claimed a capital gains reserve on a disposition of QSBCS or QFFP in a prior year of the trust.

Forms and publications

• Guide T4037, Capital Gains
• Federal income tax and benefit information
• Form T657, Calculation of Capital Gains Deduction
• Form T936, Calculation of Cumulative Net Investment Loss (CNIL) to December 31, 2024

Related topics

• Line 12700 – Taxable capital gains
• Line 25395 – Capital gains deduction for qualifying business transfer