How to report capital gains using Schedule 3 or Schedule G

Selling investments, property, or other capital assets can trigger a capital gain or loss, and the Canada Revenue Agency (CRA) and Revenu Québec require this to be reported clearly and correctly each tax year. The two main forms used are Schedule 3 for federal tax purposes and Schedule G (TP-1.D.G) for Quebec residents.

This matters if you’ve sold shares, real estate, mutual funds, or even cryptocurrency. Each of these is considered a capital asset, and any gain or loss must be calculated and reported—even if the amount is small or results in a net loss.

This article will walk you through what Schedule 3 and Schedule G are, how they are structured, and what information you’ll need to complete them properly.

What Is Schedule 3?

Schedule 3 is part of your federal personal income tax return (T1) and is used to report capital gains and losses. You must complete it if you:

• Sold or disposed of securities: This includes stocks, bonds, mutual funds, ETFs, or options—whether held personally or through a non-registered investment account.

• Sold a real estate property: If it is not your principal residence, such as a rental or vacation home, the gain is fully taxable.

• Sold or disposed of other capital property: This includes cryptocurrency, collectibles, artwork, vehicles, or any personal-use property worth more than $1,000.

• Transferred business interests or partnerships: These are treated as capital dispositions if ownership changes or is sold.

Only 50 percent of your net gain is taxable, and this is reported as your taxable capital gain on line 12700 of your return.

What Is Schedule G (TP-1.D.G)?

Schedule G is Quebec’s version of Schedule 3, required for Quebec residents who have capital gains or losses. You must complete it if you:

• Sold taxable capital assets as described above

• Have unused capital losses from previous years you want to apply against gains

• Received capital distributions or flow-through shares that are treated as deemed dispositions under Quebec rules

This form allows Revenu Québec to calculate your Quebec capital gains tax separately from your federal return and links to line 139 of your TP-1 return.

What You Need to Complete the Forms

Gather the following information before you begin:

• Descriptions and acquisition details

  • Asset name or type (e.g., ABC stock, condo in Montreal)

  • Acquisition date and cost (including commissions or legal fees)

  • Total number of shares or units sold, if applicable

• Disposition details

  • Date of sale or transfer

  • Proceeds of disposition (sale price or fair market value)

  • Outlays and expenses incurred to sell the property

• Adjusted cost base (ACB)

  • Your original cost plus any adjustments such as reinvested dividends, capital improvements (for real estate), or return-of-capital distributions

• Foreign income reporting

  • Convert all amounts to Canadian dollars using CRA-approved exchange rates

  • Retain all foreign tax slips or withholding statements to claim credits if applicable

Comparing Schedule 3 and Schedule G

How the Forms Are Structured

Schedule 3 is divided into sections:

• Publicly traded shares and mutual funds
  Record proceeds, ACB, and gain/loss for each investment sold during the year.

• Real estate and depreciable property
  Includes rental or vacation properties (excluding exempt principal residences).

• Personal-use property and other categories
  Includes antiques, jewelry, or other property where proceeds exceed $1,000.

Each section calculates individual gains or losses which are summarized at the bottom.

Schedule G includes:

• Similar asset categories to Schedule 3

• Boxes for carrying forward or applying past capital losses

• Sections for stock options, business shares, and Quebec flow-through shares

• Final result reported on line 139 of your Quebec return