TP-726.7-V: Capital Gains Deduction on Qualified Property

You can claim this deduction if you realized capital gains on the disposition of qualified property and you’re a Canadian resident. For the purposes of the capital gains deduction, Revenu Québec considers you to be a Canadian resident if you lived in Canada throughout 2024, for part of 2024 and throughout 2023, or you expect to be a resident throughout 2025.

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 on 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. To calculate your CNIL, complete form TP-726.6-V: Cumulative net investment loss to calculate your CNIL.

You’ll need to enter your taxable capital gains on the TP-726.7-V page in order to calculate your capital gains deduction.

For each year from 1994 to 2001, enter only the positive amount obtained by adding the net taxable capital gains (or net capital loss) and the farming or fishing income from the disposition of incorporeal capital property. This is:

• the total of lines 883 and 890 of Schedule G for 1995, 1996 and 1997
• the amount on line 8 of the TP-726.7-V form completed for 1998 and each subsequent year (or the amount that would have been entered on line 8 had the form been completed for the year(s) concerned)

For 2002 and each subsequent year, enter the net taxable capital gains amount, which is the amount from line 98 of your Schedule G, if it is positive.

The amount of net taxable capital gains on qualified property you’ve reported previously is the following:

• For each year before 1998, this is the lesser of the following amounts:
  • the taxable capital gains
  • the amount of net taxable capital gains on qualified property and on other property entitled to the deduction, for years before 1994. For 1994 and subsequent years, this amount is the amount by which the total of lines 875 and 883 of Schedule G exceeds the amount on line 889 of that schedule.
  
  
• For each year from 1998 to 2001, this is the amount from line 9 of form TP-726.7-V (or the amount that would have been entered on line 9 had the form been completed for the applicable year(s)).
  
  
• For 2002 and each subsequent year, this is the amount of net taxable capital gains on qualified property found on line 1 of the TP-726.7-V form(s) completed for the applicable year(s).

Follow these steps in H&R Block’s 2024 tax software:

Before you begin, make sure you told us that you lived in Québec on December 31, 2024.

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.

4. Under the BOUGHT/SOLD SECURITIES OR OTHER PROPERTY heading, select the checkbox labelled Capital gains deduction on qualified property (TP-726.7-V), then click Continue.
   
   
5. 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?.
   
   
6. Enter your information into the tax software.