Gifts of shares, stock options, and other capital property

This page provides information for donors of certified Canadian cultural property, ecologically sensitive land, or other capital property such as bonds, shares or stock options.

Gifts of publicly traded shares and stock options

You may be entitled to an inclusion rate of zero on any capital gain resulting from the donation of any of the following properties to a qualified donee:

• a share of the capital stock of a mutual fund corporation
• a unit of a mutual fund trust
• an interest in a related segregated fund trust
• a prescribed debt obligation
• a share, debt obligation, or right listed on a designated stock exchange
• certified ecologically sensitive land, including a covenant or an easement to which land is subject or, in the case of land in Quebec, a personal servitude where certain conditions are met or real servitude gifted to a qualified donee other than a private foundation a real servitude or under certain conditions, a personal servitude

The inclusion rate of zero is extended to any capital gain realized on the exchange of shares of the capital stock of a corporation for securities listed in the first five bullets above that are then donated if the capital stock shares meet certain conditions. In cases where the exchanged property is a partnership interest, a special calculation is required to determine what the capital gain will be. For more information, see Guide P113, Gifts and Income Tax.

If there is no advantage received in respect of the gift, the full amount of the capital gain is eligible for the inclusion rate of zero. However, if you receive an advantage in respect of the gift, only a portion of the capital gain is eligible for the inclusion rate of zero. The rest is subject to the inclusion rate calculated on Schedule 3, Capital Gains or Losses.

Generally, if you donate property to a qualified donee that is, at the time of the donation, included in a flow-through share class of property, in addition to any capital gain that would otherwise be subject to the zero inclusion rate discussed above, you may be deemed to have a capital gain from the disposition of another capital property. For more information, see Guide P113, Gifts and Income Tax.

The amount subject to the inclusion rate of zero is calculated using the following formula:

A x (B ÷ C)
Where
A = the capital gain
B = the eligible amount of the gift
C = the proceeds of disposition

Completing Form T1170 and Schedule 3

Complete Form T1170, Capital Gains on Gifts of Certain Capital Property for all donations of these properties. Report these amounts for each disposition on Schedule 3 as indicated on Form T1170.

Gifts of ecologically sensitive land

If you made a gift of ecologically sensitive land to certain qualified donees (other than to a private foundation), the inclusion rate of zero may apply to your capital gain.

Use Form T1170, Capital Gains on Gifts of Certain Capital Property, to report the amounts.

To qualify for the capital gains inclusion rate of zero, you must meet certain conditions and other special rules may apply. For more information, see Guide P113, Gifts and Income Tax.

Selling or donating certified Canadian cultural property

You do not have to report a capital gain when you sell or donate certified Canadian cultural property (national treasures) to an institution or public authority designated by the Minister of Canadian Heritage. The Canadian Cultural Property Export Review Board certifies the property as cultural property and will give you a certificate for tax purposes. Cultural property can include paintings, sculptures, books, manuscripts, or other objects.

Donations of cultural property made on or after March 19, 2019, no longer require that property be of “national importance” to claim the exemption from income tax for any capital gains arising on the disposition of the property. 

If you sell or donate certified cultural property to a designated institution, you may have a capital loss. The tax treatment of the loss will depend on what type of property you sold or donated. For example, the certified cultural property may be listed personal property. If this is the case, the rules for listed personal property losses will apply.

For more information on how to apply capital losses, see Guide P113, Gifts and Income Tax, or consolidated and archived Interpretation Bulletin IT-407R4, Dispositions of Cultural Property to Designated Canadian Institutions.

Forms and publications

• Guide P113, Gifts and Income Tax
• Form T1170, Capital Gains on Gifts of Certain Capital Property
• Schedule 3, Capital Gains or Losses
• Schedule 9, Donations and Gifts
• Income Tax Folio S7-F1-C1, Split-receipting and Deemed Fair Market Value

Related Topics

• Line 34900 – Donations and gifts
• Ecological Gifts Program
• Giving to charity: Information for donors