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Income Tax Act

Version of section 38 from 2007-12-14 to 2008-06-17:


Marginal note:Taxable capital gain and allowable capital loss

 For the purposes of this Act,

  • (a) subject to paragraphs (a.1) and (a.2), a taxpayer’s taxable capital gain for a taxation year from the disposition of any property is 1/2 of the taxpayer’s capital gain for the year from the disposition of the property;

  • (a.1) a taxpayer’s taxable capital gain for a taxation year from the disposition of a property is equal to zero if

    • (i) the disposition is the making of a gift to a qualified donee of a share, debt obligation or right listed on a designated stock exchange, a share of the capital stock of a mutual fund corporation, a unit of a mutual fund trust, an interest in a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a)) or a prescribed debt obligation, or

    • (ii) the disposition is deemed by section 70 to have occurred and the taxpayer is deemed by subsection 118.1(5) to have made a gift described in subparagraph (i) of the property;

  • (a.2) a taxpayer’s taxable capital gain for a taxation year from the disposition of a property is equal to zero if

    • (i) the disposition is the making of a gift to a qualified donee (other than a private foundation) of a property described, in respect of the taxpayer, in paragraph 110.1(1)(d) or in the definition total ecological gifts in subsection 118.1(1), or

    • (ii) the disposition is deemed by section 70 to have occurred and the taxpayer is deemed by subsection 118.1(5) to have made a gift described in subparagraph (i) of the property;

  • (b) a taxpayer’s allowable capital loss for a taxation year from the disposition of any property is 1/2 of the taxpayer’s capital loss for the year from the disposition of that property; and

  • (c) a taxpayer’s allowable business investment loss for a taxation year from the disposition of any property is 1/2 of the taxpayer’s business investment loss for the year from the disposition of that property.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. 1 (5th Supp.), s. 38
  • 1998, c. 19, s. 6
  • 2001, c. 17, s. 22
  • 2002, c. 9, s. 22
  • 2006, c. 4, s. 51
  • 2007, c. 35, s. 15

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