TP-726.20.2-V: Capital gains deduction on resource property

You can use the TP-726.20.2-V form to calculate your capital gains deduction for any capital gains that resulted from the disposition (sale or transfer) of a resource property. Resource properties can include:

  • Flow-through shares
  • An interest in a partnership that invested in flow-through shares or
  • Resource expenses that you paid after May 14, 1992

You can claim this deduction if you meet all of the following conditions:

  • You’re a Canadian resident and lived in Canada throughout 2023, part of 2023 and throughout 2022, or you expect to be a resident throughout 2024
  • At the end of 2023, the limit on your exploration expenses amount incurred in Québec was positive
  • You’re reporting the capital gains no later than one year after the deadline for filing your 2023 tax return

Even if you realized a capital gain on one or more of the resource properties listed above, you can’t claim the capital gains deduction if:

  • You acquired your flow-through shares or partnership interest before May 15, 1992 or between June 13, 2003 and March 30, 2004 unless they were issued following the application for a receipt of a final prospectus (or for an exemption from filing a prospectus) made before June 13, 2003.
  • If the resource property you disposed of was also a qualified farm or fishing property or small business corporation shares, you can’t claim a capital gains deduction on resource property for that property unless you’ve already used up the capital gains deduction on qualified property.

Follow these steps in H&R Block’s 2023 tax software:

Before you begin, make sure that you told us that you lived in Québec on December 31, 2023.

  1. On the left navigation menu, under the Credits & deductions tab, click Tax Topics.

  2. Select the Investment income & expenses checkbox.

  3. At the bottom of the page, click Add selected topics to my return.

  1. Under the RESOURCE INCOME AND CREDITS heading, select the checkbox labelled Capital gains deduction on resource property (TP-726.20.2-V), then click Continue.

  2. When you arrive at the page for Capital gains deduction on resource property (TP-726.20.2-V), enter your information into the tax software.