What's new for capital gains

Lifetime capital gains exemption limit

For dispositions in 2016 of qualified small business corporation shares, the lifetime capital gains exemption (LCGE) limit has increased to $824,176. For more information, see What is the capital gains deduction limit?

Disposition of a principal residence

If you sold your principal residence in 2016, the sale must now be reported, along with any principal residence designation, on Schedule 3, Capital Gains (or Losses). See Principal residence and other real estate for new reporting requirements. Under proposed changes, the CRA will be able to accept a late designation in certain circumstances, but a penalty may apply. For more information, go to Reporting the sale of your principal residence for individuals (other than trusts) and select question 7.

Extended reassessment period

Under proposed changes, beginning with taxation years that end after October 2, 2016, the CRA may at any time reassess an income tax and benefit return beyond the normal reassessment period where:

• the taxpayer does not report on their income tax and benefit return a sale or other disposition of real estate by the taxpayer;
• the taxpayer does not file an income tax and benefit return but the CRA issues an assessment of tax (for example, after a review of a taxpayer who did not file a return); or
• the taxpayer owned property directly or indirectly through a partnership and the partnership did not report the sale or other disposition in the partnership information return, if it was required to file one.

Under this extended reassessment period, the reassessment is limited to amounts reasonably relating to the unreported or previously unreported disposition of real estate.
For more information, go to Proposed changes to improve reporting of the sale or disposition of real estate.

Date modified:

2017-01-03