Canada capital gains
Lifetime capital gains exemption, how much it covers.
Enter your gain and any exemption you already used. See the gain covered, the capital gains deduction and the gain still taxable.
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Result
Method and sources
Formula: room = limit minus gains already claimed minus other reductions. Gain covered = the smaller of the gain and the room. The capital gains deduction = covered gain x inclusion rate. Taxable capital gain after = (gain minus covered gain) x inclusion rate.
Rules used: the CRA's line 25400 page gives the lifetime capital gains exemption as $1,250,000 for dispositions of qualifying property, with a maximum capital gains deduction of $625,000 (50% of $1,250,000); the page describes the 2025 figure as a proposed change, so confirm the enacted limit for your year of sale. It also says that qualifying property is qualified small business corporation shares and qualified farm or fishing property. The deduction is calculated on Form T657 and claimed at line 25400. The limit is an editable field: confirm the figure for your year of sale on the CRA page.
Not modelled: cumulative net investment loss, allowable business investment losses and alternative minimum tax. Enter their effect in "Other reductions" if you know it.
Sources, retrieved 2026-10-18:
- Canada Revenue Agency, Line 25400, Capital gains deduction
- Canada Revenue Agency, Completing Schedule 3
A planning estimate, not tax advice. Have an accountant confirm that your shares or property qualify.
FAQ
How much is the lifetime capital gains exemption?
The CRA line 25400 page gives $1,250,000 for dispositions of qualifying property, a maximum capital gains deduction of $625,000 at a 50% inclusion rate. It describes the 2025 figure as a proposed change, so check the limit that applies to your sale date.
What property qualifies?
The CRA lists qualified small business corporation shares and qualified farm or fishing property. The CRA page names only these two categories, so ordinary investments such as listed shares or a rental property are not on that list.
How do I claim it?
Complete Form T657, Calculation of Capital Gains Deduction, and claim the allowable amount at line 25400 of your return.
Can I use the exemption more than once?
Yes, until you have used the whole limit. Enter earlier claims in the second field so the tool only counts the room that is left.