By using form TP-726.7-V, you can claim a capital gains deduction for your qualified property (such as qualified farm property and/or fishing property and qualified small business shares). You’ll also need to use this form if you haven’t reached the capital gains deduction limit and wish to report a gain from selling incorporeal capital property (such as goodwill, a trademark, or a farm quota) that was qualified farm or fishing property.
Note: You’ll need to also complete the federal T657: Calculation of Capital Gains Deduction form.
You can claim this deduction if you were a resident of Canada:
- Throughout 2016
- Throughout 2015, if you didn’t live in Canada in 2016 or
- Throughout 2017, if started living in Canada in 2016
Your deduction depends on the amount you claim on your federal income tax return. If you claim an amount that’s less than what you’re entitled to, you need to claim the same amount on your Québec return, as long as it’s less than the maximum amount you’re entitled to for provincial tax purposes.
Keep in mind, your cumulative net investment loss (CNIL) as at December 31 might reduce your capital gains deduction. Your CNIL is equal to the investment expenses you’ve paid after 1987, minus the investment income you earned after 1987. You can complete form TP-726.6-V: Cumulative net investment loss to calculate your CNIL.
If you sold resource property (such as flow-through shares) that resulted in capital gains, then you can calculate your deduction by using form TP-726.20.2-V: Capital gains deduction on resource property.
Where do I claim this?
Follow these steps in H&R Block’s tax software to file your 2016 taxes:
Before you begin, make sure you told us that you lived in QUÉBEC on December 31, 2016.
- 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 PENSION PLANS AND INVESTMENTS icon. You’ll find yourself here:
- Under the BOUGHT/SOLD SECURITIES OR OTHER PROPERTY, select the checkbox labelled Capital gains deduction on qualified property (TP-726.7-V), then click Continue.
- When you arrive at the page for the Capital gains deduction, answer Yes to the question Would you want to claim the capital claims deduction?.
- Enter your information into the tax software.