Capital Gains and Investments

Getting Started with Capital Gains and Investment Income

Whether you are selling investments, earning interest, or sharing accounts with a partner, it is important to understand how these activities affect your tax return. Capital gains and investment income are subject to specific reporting rules and forms, and knowing how to apply deductions and split income correctly can help you reduce your overall tax burden. This guide explains how to navigate reporting, shares key terminology, and outlines how to use available tools like Auto-Fill and Schedule 3.

What Are Capital Gains and Investment Income?

Capital gains occur when you sell or transfer an asset for more than you paid for it. This includes securities, real estate (excluding your principal residence in most cases), and even cryptocurrency. Investment income can include interest, dividends, and returns from mutual funds or partnerships. These amounts may come with slips such as T3, T5, or T5013, depending on the source.

Some investments involve shared ownership or special rules, such as attribution between spouses or reporting partnership interests. By understanding how to allocate, split, and deduct appropriately, you can file an accurate and optimized return.

Why This Section Matters

Capital gains and investment income can have a significant impact on your taxes, especially if you have large sales, co-owned accounts, or assets that qualify for special treatment like the Lifetime Capital Gains Exemption (LCGE). Misreporting or missing deductions can lead to overpayment or errors that delay your return. Learning the rules helps you stay compliant and take full advantage of deductions and planning opportunities.

The benefits of understanding capital gains and investments

Report your gains and losses accurately using the correct forms
Split shared income properly between spouses or co-owners
Claim deductions such as CCA or AIIP where allowed
Understand how to apply reserves and how deemed dispositions work
Use Auto-Fill tools to simplify reporting and avoid missed slips

Make the Most of Investment Reporting

Investing can help grow your wealth, and reporting your investment income correctly helps you keep more of what you earn. With the right knowledge and forms, you can claim available deductions, handle joint reporting, and plan for future gains more effectively.

Understanding Capital Gains and Investment Income

When you earn money from investments or sell assets like stocks or property, you may need to report capital gains or other investment income. This section explains how to report it properly, which forms to use, and what tax benefits might apply:

How to report capital gains using Schedule 3 or Schedule G: Learn which schedule to use when reporting gains or losses and how to fill it out correctly.
Understand deemed disposition, and how do reserves work: Understand when a transfer counts as a sale for tax purposes, and how to delay part of your income using a reserve.
Reporting cryptocurrency and partnership income: Find out how to report trades involving virtual currency and income earned through a business partnership.
How to report joint investment income: See how to divide income between co-owners and report it fairly between spouses or other joint holders.
Splitting income on T3, T5, and T5013 slips: Step-by-step help on how to share income shown on these slips when investments are owned with someone else.
Attribution rules and using CRA Auto-Fill for shared returns: Learn how income is taxed between spouses under attribution rules and how to simplify your return using CRA’s Auto-Fill tool.
Understand investment expenses can be claimed: Understand which costs—like depreciation (CCA), interest, or shared ownership expenses—can be deducted.
Understand the T657 form for capital gains deductions: A simple guide to the form used to claim capital gains deductions, including who qualifies and how to complete it.
Who qualifies for the Lifetime Capital Gains Exemption (LCGE): Learn what types of assets are eligible for this exemption and how the lifetime limit is applied.
Glossary: An A–Z guide to essential tax planning terminology for informed financial strategies.