You’ll use form T2017 to claim a reserve on a capital property that you disposed of (sold) in 2016 or if you’re reporting a reserve claimed on your 2015 tax return. If you sold a capital property, and the deal was structured so that you’d receive some of the payment this year and the rest over the next several years, you might be able to claim a reserve. This allows you to report a portion of the capital gains in the year(s) you receive payment for the disposition.
Note: If you’re a resident of Québec and you disposed of capital property and a portion of the proceeds wasn’t payable until after the end of the year, you can complete Schedule G to see if you can deduct a reserve on your capital gains. Having said that, the amount you’ll be able to deduct as a reserve on your Québec return depends on your federal reserve deduction amount. For more information, refer to the Capital Gains and Losses (IN-120-V) brochure.
Tax Tip: At most, reserves can only be claimed over the course of a 5-year period. Naturally, there are exceptions; if the disposition involved the transfer of a family farm or fishing property, or small corporation shares to a child, the reserve period can be extended to 10 years.
In certain situations, you won’t be able to claim a reserve when disposing of capital property. Specifically, if you:
- weren’t a Canadian resident on December 31, or at any time in the following year
- were exempt from paying tax at the end of the year, or at any time in the following year or
- sold the property that you own or control in any way
Where do I claim this?
Important: Remember, you'll need to have your T2017 form from previous year(s) on hand in order to complete this page.
Follow these steps in H&R Block’s tax software to file your 2016 taxes:
- On the PREPARE tab, click the LET’S TALK ABOUT 2016 icon.
- Select the checkbox labelled I had investments and/or investment income, or I bought and/or sold property.
- Click the PENSIONS PLANS AND INVESTMENTS icon. You'll find yourself here:
- Under the BOUGHT/SOLD SECURITIES OR OTHER PROPERTY heading, select the checkbox labelled Summary of reserves on dispositions of capital property (T2017), then click Continue.
- When you arrive at the Summary of reserves on dispositions of capital property page, enter your information into the tax software.
I need help completing this page
You might need your T2017 from prior years in order to complete this page.
- Amount of reserve from your most recent disposition of property (enter the most recent amount included in one of the two previous lines) - Complete this field if you’re reporting the following reserves and these reserves were from dispositions in different tax years:
- Amount of 2015 reserve for dispositions of QFFP transferred to your child after March 18, 2007, and before April 21, 2015, and all other dispositions of QFFP after 2011 and before April 21, 2015 (enter the amount from line 6684 on your 2015 T2017 form) or
- Amount of 2016 reserve for dispositions of QFFP transferred to your child after March 18, 2007, and before April 21, 2015, and all other dispositions of QFFP after 2012 and before April 21, 2015
In this case, include in this field, the amount of the 2016 reserve of QFFP transferred to your child after March 18, 2007, and before April 21, 2015, and all other dispositions of QFFP after 2012 and before April 21, 2015 from the most recent disposition.
- Amount of 2016 reserve for dispositions of QFFP after April 20, 2015 and you’re creating a new QFFP reserve as a result of another disposition in 2016
In this case, include in this field, the amount of the 2016 reserve for dispositions of QFFP after April 20, 2015 from the most recent disposition.
If you’re reporting reserves from two or more dispositions, you’ll need to document the breakdown of the amounts of each reserve you’ve reported. Keep this breakdown in your records in case the Canada Revenue Agency (CRA) asks for it at a later date.
Note: You don’t need to complete this field if you’re reporting a new reserve in the field Amount of 2016 reserve for dispositions of QFFP after April 20, 2015 or are reporting only one reserve amount from a disposition in a prior year.
- Amount of 2016 reserve for dispositions of property after 2012 (other than the dispositions reported in the sections above)
Enter in this field the amount of 2016 reserve for dispositions of property after 2012 other than the dispositions listed in the following fields:
- Amount of 2016 reserve for dispositions of QFFP transferred to your child after March 18, 2007, and before April 21, 2015, and all other dispositions of QFFP after 2012 and before April 21, 2015
- Amount of 2016 reserve for dispositions of QFFP after April 20, 2015
- Amount of 2016 reserve for dispositions of QSBCS transferred to your child after March 18, 2007, and all other dispositions of QSBCS after 2012
- Amount of 2016 reserve for dispositions transferred to your child after 2007, of family farm or fishing property other than QFFP and shares of capital stock of a small business corporation other than QSBCS
