The federal and provincial tax on a capital gain in 2026 — at the 50% inclusion rate, with the principal residence exemption and a capital-loss offset — built on the same CRA-based tax-bracket engine as our take-home pay calculator.
Quick answer
Canada has no separate capital gains tax rate: in 2026 only 50% of a gain is added to your income and taxed at your normal federal and provincial rates. In the calculator's example, an Ontario resident with $75,000 of other income who sells an investment condo for a $130,000 gain owes $23,038.61 of tax on that gain, about 17.7% of it.
There's no separate "capital gains tax" in Canada
Despite the common phrase, Canada does not have a capital gains tax rate as such. What actually happens is simpler once you see the mechanism: only half of your capital gain is added to your income, and then your normal federal and provincial income tax brackets do the rest — the same brackets that tax your salary, self-employment income, or anything else. CRA's own worked example in guide T4037 makes the shape clear: sell 400 shares for proceeds of $6,500, with an adjusted cost base of $4,000 and $60 in outlays, and the capital gain is $6,500 − ($4,000 + $60) = $2,440; at the 2026 inclusion rate of 50%, the taxable capital gain that actually lands on your return (line 12700) is $1,220. This calculator runs exactly that formula, then goes one step further and works out what that taxable amount actually costs in federal-plus-provincial tax once it's stacked on top of your other income for the year.
Capital gain = Proceeds of disposition − (Adjusted cost base + Outlays and expenses of sale)
Taxable capital gain = Capital gain × 50% (the 2026 inclusion rate)
Tax on the gain = Tax(other taxable income + taxable capital gain) − Tax(other taxable income)
The inclusion rate — and the increase that never happened
The inclusion rate — the fraction of a capital gain that counts as taxable income — has been one-half for every year since 2001, with one bureaucratic near-exception. Budget 2024 proposed raising it to two-thirds on gains above $250,000 a year for individuals (and on all gains of corporations and most types of trusts), effective June 25, 2024. On January 31, 2025, Finance Canada deferred that date to January 1, 2026, and on March 21, 2025, Prime Minister Mark Carney's government announced it would cancel the increase. It never became law: paragraph 38(a) of the Income Tax Act, as consolidated to September 21, 2026, still reads one-half, and CRA's capital-gains guidance for the 2025 return (last updated February 2026) applies one-half. A small number of corporations had filed at two-thirds on CRA's earlier guidance, and on January 31, 2025 CRA said it would reassess them. This calculator uses the 50% rate throughout; if you've seen "two-thirds" mentioned anywhere about 2024 to 2026 gains, it refers to a proposal that was cancelled.
When a gain is not a gain at all: the principal residence exemption
The single most common way Canadians avoid capital gains tax entirely is the principal residence exemption (PRE). If a property was your principal residence — ordinarily inhabited by you, your spouse or common-law partner, or your child — for every year you owned it, the entire gain on selling it is exempt from tax. So is the gain when it was your principal residence for every year but one: the formula in paragraph 40(2)(b) of the Income Tax Act adds one year to the years you designate (if you were a resident of Canada in the year you bought it), which matters if you owned two homes in the year you moved. You (or your family unit) can only designate one property per year, and you still have to report the disposition and file Form T2091(IND) to claim the exemption even though no tax is owed (complete page 1 only when the home qualified for every year, or every year but one); Quebec residents also file Revenu Québec's form TP-274-V with Schedule G of the Quebec return. Check the box on this calculator and every downstream number collapses to zero, because there is nothing left to tax. The capital gain itself is still shown, just not the taxable portion of it. One case the box cannot handle: a housing unit you owned for fewer than 365 consecutive days is a flipped property, and its gain is business income, taxed in full, with no principal residence exemption, unless the sale was because of certain life events such as a death, a separation or an eligible move. A loss on your home cannot be claimed: a home is personal-use property, and the Income Tax Act treats a loss on it as nil.
Netting a capital loss against this gain
A capital loss from this same year, or a net capital loss carried forward from an earlier year, reduces the amount of this gain that is taxed. This calculator takes them in two boxes because the law treats them differently. A loss from this year goes in as the loss itself, before halving: the calculator applies the 50% inclusion rate to it and subtracts the result from the taxable capital gain, down to a floor of zero, so it lowers your net income as well as your taxable income. A net capital loss carried forward is already a loss at the inclusion rate in force when it was incurred, which was one-half for a loss from 2001 to 2025, so you enter the balance on your notice of assessment as it stands, not halved and not doubled. The box is meant for losses from 2001 to 2025: CRA lists other rates for 1988 to 2000 and has special rules for losses from before 23 May 1985, and the box makes no adjustment for them. CRA requires a balance at another rate to be adjusted to the rate of the year it is claimed in, and its Capital Gains Worksheet has a chart for line 25300 that does it, so make that adjustment before you enter a balance from 1988 to 2000. You claim it on line 25300 of your return, and CRA says it lowers your taxable income but not your net income. Each year it is limited to that year's taxable capital gains, so this calculator uses no more of it than the taxable gain left after this year's losses, and the rest of the balance stays available for a future year. The split matters because the federal basic personal amount, Manitoba's and Yukon's, and British Columbia's tax reduction are worked out on net income. Where net income is past the point at which one of them starts to shrink ($181,440 for the federal and Yukon amounts, $200,000 for Manitoba's, $25,570 for British Columbia's reduction), a carried-forward balance and a loss from this year that takes the same amount off the taxable gain can give a different tax, because only the loss from this year lowers net income; they give the same tax again once net income is past the point where it stops shrinking whichever way the loss is counted ($258,482, $400,000 and $44,952). Not every loss counts: a loss on personal-use property such as your home or cottage cannot be claimed, and a loss on depreciable property such as a rental building is not a capital loss (it may be a terminal loss, which you deduct from your income in full). Two real rules sit behind that simple subtraction which this calculator doesn't model: the superficial loss rule denies a loss if you or an affiliated person buy back the identical property within 30 days before or after the sale and still hold it 30 days later (if you are the one who buys the replacement, you can usually add the denied amount to its cost base instead), and a net capital loss that isn't fully used this year, after your allowable capital losses have first been applied against this year's taxable capital gains, can be carried back three years (via Form T1A) or forward indefinitely to offset another gain. Working out the balance to carry back or forward is a separate calculation against your whole tax history, not just this one sale, and this calculator does not do it.
Selling a small business or a farm: the lifetime capital gains exemption
Owners of qualified small business corporation (QSBC) shares, or qualified farm or fishing property, get a much larger break than ordinary loss-netting: the lifetime capital gains exemption (LCGE). For 2026 it's $1,275,000 of exempt gain for QSBC shares, a $637,500 deduction against the taxable capital gain, and the same $1,275,000 for farm or fishing property: since S.C. 2026, c. 3 (the Budget 2025 Implementation Act, No. 1, assented to March 26, 2026), one $625,000 deduction limit in paragraph 110.6(2)(a) of the Income Tax Act, indexed from 2026, covers both. This calculator doesn't apply the LCGE, because doing so correctly requires knowing how much of it you've already claimed in past years. Claiming it also does not take a gain out of the federal alternative minimum tax: when that tax is worked out the gain counts in full but only 7/5 of the amount deducted for the exemption is allowed, so part of an exempt gain can stay in the base, and the minimum amount replaces the regular tax whenever it is higher. Someone who claims the exemption can therefore owe minimum tax while their regular tax is nil. If your sale might qualify, treat this calculator's number as an upper bound on your regular tax, not the final answer.
Worked example — selling an Ontario rental property in 2026
An Ontario resident with $75,000 of other income (employment income) for 2026 sells an investment condo — never their principal residence — for $500,000. Their adjusted cost base is $350,000 (the price they paid, plus the legal fees and commissions of buying and the cost of capital improvements, but not repairs) and they pay $20,000 in real estate commission and legal fees on the sale. The example assumes no capital cost allowance (depreciation) was ever claimed on the condo; if it was, the whole amount claimed is added back to your income when you sell the building for at least what it cost (recapture), and that amount is taxed in full, which this calculator does not do.
- Capital gain: $500,000 − ($350,000 + $20,000) = $130,000.
- Taxable capital gain: $130,000 × 50% = $65,000.
- Tax without the gain (Ontario; $75,000 of employment income is $74,273 of taxable income after the enhanced-CPP deduction): federal $8,258.60 + Ontario $4,446.06 ≈ $12,704.65, from the same engine as the take-home pay calculator.
- Tax with the gain (Ontario; $74,273 + $65,000 = $139,273 taxable, with CPP and EI unchanged because a gain isn't employment income): federal $22,806.14 + Ontario $12,937.13 (of which $1,910.66 is surtax, since Ontario tax now clears both surtax thresholds) ≈ $35,743.26.
- Tax on the gain: $35,743.26 − $12,704.65 ≈ $23,038.61 — an effective rate of about 17.7% on the full $130,000 gain (roughly 35% of the $65,000 taxable half: $42,772 of it is taxed federally at 20.5% and the other $22,228 at 26%, with Ontario's higher brackets and its surtax on top).
- After-tax proceeds: $500,000 − $20,000 (outlays) − $23,038.61 (tax) ≈ $456,961.39.
Figures above are rounded to the cent at each step for readability; the calculator itself carries full precision throughout, so its result can differ from this worked example by a few cents.
What this calculator doesn't do
The taxable half of a gain is added to your income, and it never triggers CPP or EI, which apply only to employment earnings. So this tool works out "tax with the gain minus tax without it" by stacking the taxable gain on top of your other income inside the same federal-plus-provincial engine as the take-home pay calculator while leaving CPP/QPP, EI/QPIP and the Canada Employment Amount exactly where they were. Those payroll terms are estimated from your other income as though it were employment income, and for pay they are credits a return gives too, so they leave the tax on the gain where a return would put it (they do not always cancel out: where the federal or provincial tax without the gain is nil, the part your pay cannot use lowers the tax on the gain, and Ontario's tax reduction and surtax, worked out on the tax after these credits, can move it too, all as on a return); the one trace they leave is when your other income is below $1,501, where the gain picks up a slice of the Canada Employment Amount credit it wouldn't really earn: at most about $210, or about $306 in Yukon, where the territorial credit adds to it. That is for pay: other kinds of income added to the box get credits a return would not give them, so the tax shown can be off by a few hundred dollars. It also doesn't model the superficial loss rule, loss carrybacks, the lifetime capital gains exemption, or any provincial credit or deduction beyond the basic personal amount; see the FAQ below for each of those.
Four more gaps matter for large or unusual sales. First, the federal alternative minimum tax is not calculated. It counts the whole gain, not half, at 20.5% of adjusted taxable income above $181,440, less half of your basic credits, and it replaces the regular tax when it comes out higher. On these rules that starts at a gain of roughly $345,000 with no other income, $390,000 with $40,000 of other income and $475,000 with $75,000. When this tool sees a gain that large it says so beside the result, and it does not add the minimum tax to the figure above. Minimum tax you pay can generally be recovered against your regular tax over the next seven years. This year's losses come off the minimum tax's base in full, but a net capital loss carried forward comes off it by no more than the amount deducted for the regular tax, and this tool takes exactly that amount, which is the figure in the carried-forward box. A carried-forward balance that cancels the whole taxable gain, and with it all or nearly all of the regular tax on that gain, can therefore still leave the note showing. Second, a gain also raises your net income, so it can change the age amount, the Canada child benefit and the OAS repayment (CRA's social benefits repayment), none of which is modelled here. Third, the principal residence box does not test whether the home was a flipped property (owned for fewer than 365 days), whose gain is business income. Fourth, depreciation claimed on a rental building in earlier years is added back to your income when you sell the building at a gain (recapture), and it is taxed in full.
FAQ
Is there a separate capital gains tax rate in Canada?
No — Canada has no flat capital gains tax rate. Only half (the 2026 inclusion rate is 50%) of your capital gain is added to your other income for the year, and the whole total — ordinary income plus that taxable half of the gain — is then taxed using your usual federal and provincial income tax brackets. That's why this calculator asks for your other income: the same $65,000 taxable capital gain costs a very different amount in tax depending on what bracket it lands in on top of everything else you earned.
What happened to the proposed increase to a two-thirds inclusion rate?
It was cancelled. Budget 2024 proposed raising the inclusion rate from one-half to two-thirds on gains above $250,000 a year for individuals (and on all gains of corporations and most types of trusts), effective June 25, 2024. On January 31, 2025 Finance Canada deferred the date to January 1, 2026, and on March 21, 2025 Prime Minister Mark Carney announced the government would not proceed with the change. It never became law: paragraph 38(a) of the Income Tax Act still reads one-half, and CRA's own capital-gains guidance for the 2025 return applies the one-half (50%) rate. A small number of corporations had filed at two-thirds on CRA's earlier guidance, and CRA said it would reassess them. This calculator uses the 50% rate.
Do I owe tax on capital gains from selling my home?
Usually not. A property that qualified as your principal residence for every year you owned it is covered by the principal residence exemption, which makes the entire gain tax-free. So is one that qualified for every year but one, because the exemption formula in the Income Tax Act (paragraph 40(2)(b)) counts one extra year if you were a resident of Canada in the year you bought the home; that is why someone who owned two homes in the year they moved can still shelter the whole gain on the one they sold. Check the box above and this calculator will show $0 tax. You still have to report the sale and file Form T2091(IND) to claim the exemption (page 1 is enough in those two cases), and only one property per family unit can be designated for a given year. One exception: a home you owned for fewer than 365 days is a flipped property, and its gain is business income, taxed in full with no principal residence exemption, unless the sale was because of certain life events such as a death, a separation or an eligible move.
Can a capital loss reduce the tax on this gain?
Yes. Enter a capital loss from this year, or a net capital loss carried forward from an earlier year, and this calculator applies it against the taxable half of this gain before working out the tax, the way net capital losses offset taxable capital gains on a real return. The two go in separate boxes. A loss from this year goes in as the loss itself, before halving, because the calculator applies the 50% inclusion rate to it, and it lowers your net income. A carried-forward balance goes in as your notice of assessment shows it: a net capital loss is already at the inclusion rate (one-half for a loss from 2001 to 2025; CRA lists other rates for 1988 to 2000 and has special rules for losses from before 23 May 1985), so it is not halved or doubled. It lowers your taxable income but, as CRA says, not your net income, which sets the basic personal amount where that amount phases out, and it cannot be more than the taxable gain left after this year's losses. Not every loss counts: a loss on personal-use property such as your home or cottage cannot be claimed, and a loss on depreciable property such as a rental building is not a capital loss (it may be a terminal loss). One rule this calculator doesn't model: a loss is denied as a "superficial loss" if you or an affiliated person buy back the identical property within 30 days before or after the sale and still hold it 30 days later. If you are the one who buys the replacement property, you can usually add the denied amount to its cost base instead of deducting it right away. A net capital loss can also be carried back three years or forward indefinitely against taxable capital gains, after your allowable capital losses have first been applied against this year's gains; working out the balance to carry back or forward is a separate calculation this tool doesn't run.
Is there any special treatment for selling a small business, farm, or fishing property?
Yes: the lifetime capital gains exemption (LCGE), which this calculator does not apply since it needs details about your cumulative use of the exemption in past years. For 2026 the LCGE is $1,275,000 for qualified small business corporation shares and for qualified farm or fishing property alike (a $637,500 deduction against the taxable capital gain); the Income Tax Act, as amended in March 2026, sets one indexed limit for both. If your sale might qualify, a portion or all of the gain could be exempt from regular tax regardless of what this calculator shows, although the federal alternative minimum tax can still apply to it.
Why does my province matter if capital gains aren't taxed separately?
Because there's no separate provincial capital gains tax either — the taxable half of your gain simply becomes part of the taxable income your province taxes at its own bracket rates, exactly like the rest of your income. Provincial brackets, basic personal amounts, and extras like Ontario's surtax and Health Premium or BC's low-income tax reduction all apply to that combined total, which is why the same size of gain can cost noticeably different amounts of tax depending on where you live.
This page is general information based on published 2026 federal and provincial tax rules, not tax or financial advice. Your own return may differ — talk to a licensed accountant about your specific situation.
Formula last verified: 8 October 2026 — capital gain = proceeds of disposition − (adjusted cost base + outlays and expenses of disposition), taxable at the 2026 inclusion rate of one-half (50%). Every source below, except those marked as read on 11 October 2026, was re-read on 8 October 2026; each is listed with the date the page or statute itself carries. The formula and the rate:
CRA's capital-gains calculation page (2026-02-05, read in full; it addresses the 2025 return and applies 50%) and
CRA guide T4037, Capital Gains (2026-02-11; the passages cited here were read, not the whole guide), whose own worked example (400 shares: proceeds $6,500 − ACB $4,000 − outlays $60 = gain $2,440; taxable at 50% = $1,220) this page's capital-gain function reproduces exactly. Its section on identical properties (read on 23 October 2026) is the source of the note under the adjusted cost base box: for identical properties bought at different prices over time, you calculate the average cost of each at the time of each purchase, the total cost (usually the cost plus any expenses of acquiring) divided by the number owned, and a sale does not change it; its Example 1 takes 200 shares at the $18.00 average, $3,600, off the cost when 200 are sold. That one-half is the law:
Income Tax Act, section 38 (paragraph (a), "½ of the taxpayer's capital gain"; the Act is current to 2026-09-21 and was last amended 2026-06-18, the date its section pages carry). The proposed two-thirds rate:
Finance Canada's release of 2025-01-31 (deferral from 25 June 2024 to 1 January 2026),
CRA's notice of 2025-01-31 (CRA reverted to administering one-half; the small number of corporations that had filed at two-thirds on its guidance get corrective reassessments) and
the Prime Minister's Office release of 21 March 2025 (the cancellation; the saved page carries 2025-04-04). The CRA calculation page above applies 50% for the 2025 return but says nothing about the cancellation, so it is cited only for the rate. The principal residence exemption:
CRA's principal residence and other real estate page (2026-02-05; read through "Changes in use", not the farm property section), which says a home is personal-use property whose loss cannot be claimed, that page 1 of Form T2091(IND) is enough when the home was the principal residence for all years or all but one, and describes the flipped-property rule (fewer than 365 consecutive days); the formula itself is in
Income Tax Act, section 40 (2026-06-18: paragraph (2)(b), the exempt share is one plus the years designated, over the years owned; paragraph (2)(g), a loss on personal-use property or a superficial loss is nil),
section 54 (2026-06-18: the definitions of principal residence, personal-use property and superficial loss) and, for subsections 12(12) to (14) (flipped property), the
Act's full text. Quebec's form TP-274-V and Schedule G:
Revenu Québec guide IN-120-V, Capital Gains and Losses (December 2025 edition; the passages cited here). Losses:
CRA's capital losses and deductions page (2026-02-05; read through superficial loss and restricted farm losses on 8 October; on 11 October its inclusion-rate table and its section on applying net capital losses of other years were read again and its summary chart was read for the first time, and its section on allowable business investment losses was not read): an allowable capital loss is first applied against the year's taxable capital gains, what is left is a net capital loss that carries back three years or forward indefinitely and is limited each year to that year's taxable capital gains (the chart's footnote adds up to $2,000 a year against other income for a net capital loss incurred before 23 May 1985), a net capital loss incurred from 2001 to 2025 is at one-half, the table lists other rates for losses incurred in 1988 and 1989 (2/3), from 1990 to 1999 (3/4) and in 2000 (a rate taken from the 2000 Schedule 3 or notice of assessment), the page says a balance at a different rate must be adjusted to the inclusion rate of the year it is claimed in (2025 on that page; the carried-forward box makes no such adjustment), a net capital loss of another year is claimed on line 25300 and lowers taxable income but leaves net income unchanged, a personal-use property loss is not allowed, and a superficial loss can usually be added to the cost base by the person who acquires the substituted property.
Income Tax Act, section 111 (2026-06-18, read on 11 October): paragraph (1)(b) allows net capital losses of preceding years, subsection (1.1) limits that deduction to the amount determined under paragraph 3(b), which is the year's taxable capital gains less its allowable capital losses (paragraph 3(b), in the
Act's full text, is the netting that puts them into income), and subsection (8) defines a net capital loss starting from the amount by which the year's allowable capital losses exceed its taxable capital gains. T4037 adds that a loss on depreciable property is not a capital loss (a terminal loss may apply) and that recapture of CCA is included in income. The lifetime capital gains exemption, which this page describes but does not apply:
CRA's indexed personal income tax and benefit amounts table (2026-03-12: $1,275,000 exemption and $637,500 deduction limit for 2026, and the federal bracket thresholds), the
Income Tax Act, section 110.6 (2026-06-18: the $625,000 in paragraph (2)(a), which paragraph (2.1)(a) applies to small-business shares too; last amended by S.C. 2026, c. 3, s. 35) with
section 117.1 (2026-06-18: the limit is indexed for years after 2025) and
S.C. 2026, c. 3, the Budget 2025 Implementation Act, No. 1 (assented to 2026-03-26; title page and assent date read). The table's footnote 6 still describes the pre-2026 farm and fishing rule (the greater of $1,000,000 and the indexed amount); the Act governs, and the table's own 2026 row gives one figure for both. The alternative minimum tax, which this page does not calculate but flags, is in sections
127.5 (the minimum amount replaces the regular tax when it is higher),
127.51 (20.5% of adjusted taxable income above the first dollar amount of the 29% bracket, less the basic minimum tax credit),
127.52 (paragraphs (1)(d), (h), (i) and (j) were read again on 11 October; paragraph (1)(d): gains and the year's own losses are counted in full; subparagraph (1)(h)(ii): of the amounts deducted for the lifetime capital gains exemption under subsections 110.6(2) and (2.1), and under paragraph 110(1)(d.01), which this page does not discuss, 7/5 are allowed; subparagraph (1)(i)(ii): a net capital loss carried from another year comes off at the lesser of the amount deducted for the regular tax and a second amount, (B), found by recomputing earlier years' net capital losses with paragraph (1)(d) (for loss years beginning before 2024) and paragraph (1)(c.1) (a partnership interest that needs an identification number under section 237.1), and the page takes the first without computing (B): as the subparagraph was read on 11 October, the second cannot be the smaller for a loss from a person's own sales, because paragraph (1)(d) only counts that loss in full and paragraph (1)(c.1) does not touch it, while a loss from such a partnership interest, where it can be, is not modelled; subparagraph (1)(j)(iii): only half of the deduction for enhanced CPP or QPP contributions is allowed) and
127.531 (the credit is half of the amounts deducted for the basic personal amount, the Canada Employment Amount and CPP/EI premiums, among others) of the Income Tax Act (all 2026-06-18), and in subsection 120.2(1) (minimum tax paid is deductible from regular tax in the next seven years, to the extent the regular tax exceeds the minimum amount then;
full text), with CRA pointing to Form T691 in T4037. The note beside the result appears when that minimum amount, with the whole gain counted, this year's losses taken off in full and a carried-forward balance taken off at the amount deducted for the regular tax, is more than this page's own regular federal tax (which has the federal basic personal amount worked out on net income, as below). Both sides are taken before Quebec's abatement: section 127.5 compares them without section 120, and subsection 120(4) (
full text) takes the abatement from the greater of the two. With no losses, the note starts at gains of $341,227 with no other income, $391,548 with $40,000 and $472,820 with $75,000. A separate hand computation on 8 October 2026 gave about $345,000, $393,000 and $475,000 before paragraph (1)(j) was applied; an independent check the same day, with it, gave $344,028, $391,548 and $472,820, and found no case across the thirteen jurisdictions, other income up to $300,000 and gains up to $5,000,000 where the minimum amount is higher and the note stays hidden. On 11 October 2026, with a box for each kind of loss, a reference computation written into
tests/capital-gains-goldens.js from the same sections of the Act, apart from this page's own function, was compared with the note over 12,480 combinations (the thirteen jurisdictions, eight levels of other income from $1,501 to $300,000, twelve gains from $250,000 to $5,000,000 and ten pairs of loss amounts): the note was never hidden where the reference computation has the minimum amount higher, and it matched the reference in every combination. That computation takes, as the page does, the amount deducted for the regular tax as the lesser of the two amounts in paragraph (1)(i)(ii); the second amount, (B), is not computed in either place. One case is read the cautious way. Section 127.531 takes half of the amounts "deducted" for the basic personal amount and the other credits; when the regular federal tax is nil those credits were not all needed, the section does not say whether an unneeded credit still counts, and CRA's Form T691 was not among the texts read. The page counts the credit only as far as there was regular tax for it to come off, which leaves more minimum tax, so the note can show where the other reading finds none: the regular federal tax nil (a carried-forward balance cancels the taxable gain, or nearly, and other income is too low to be taxed) and adjusted taxable income within about $5,600 above $181,440. A second reference computation in the suite takes that reading, and the note is never hidden where either of the two has the minimum amount higher. Where other income is under $1,501 the engine's Canada Employment Amount trace lowers the regular tax by up to $210, so the note appears up to about $2,800 of gain early there (the $341,227 above). The note concerns the federal tax only; no source read covers provincial minimum taxes. Tax on the gain is computed as Tax(other taxable income + taxable capital gain) − Tax(other taxable income), using the same federal-and-provincial tax engine — the RATES object, bracketTax, federalBPA, provBPA, cppAmounts, qppAmounts, eiAmount, qpipAmount, ohp, ohpMarginal, bcReductionAmt and computeTakeHome — as
canada/take-home-pay-calculator.html (see that page's own "Formula last verified" note for the full federal and provincial bracket and credit sourcing trail, and for the date those sources were last read, which is that page's date and not this one's): both pages load the one shared
/ca-tax-2026.js, and
tests/capital-gains-goldens.js requires that same file. The engine is cross-checked there against the same Ontario $60,000 reference case asserted in that page's own golden suite (
tests/canada-take-home-goldens.js), and the test fails if this page stops loading
/ca-tax-2026.js or defines its own
var RATES table. The taxable gain is added to taxable income only: the engine is called with the other income as gross and the taxable gain as a negative deduction, so CPP/QPP, EI/QPIP, the Canada Employment Amount and Quebec's deduction for workers are computed on the other income in both runs, as a return computes them for pay, while the brackets, Ontario's surtax, Health Premium and tax reduction see the combined taxable income, and the federal basic-personal-amount phase-out, Manitoba's and Yukon's basic personal amounts and BC's tax reduction see the combined net income (the two figures differ only by a carried-forward balance). An earlier draft passed the combined income to the engine as though it were all employment income, which let the gain earn CPP and EI credits and understated the tax on a gain by roughly $150 to $1,200 for anyone whose other income sat below the $68,900 EI and $85,000 CPP2 ceilings (its own worked example was $173.64 low); it was corrected in the independent verification pass on 3 September 2026. On 8 October 2026 a second reader re-derived twelve cases by hand with a separate implementation and matched this page's tax on the gain to the cent: Ontario at $75,000 of other income (the worked example), at $0 and at $40,000 on a $600,000 gain, and at $75,000 with a $50,000 loss; Quebec at $75,000 and $100,000; British Columbia across its tax-reduction phase-out; Alberta across the federal basic-personal-amount phase-out; Manitoba across its own phase-out; Yukon at $0; and Ontario on a $1,000,000 gain with $0 and $75,000 of other income.
Added 23 October 2026 (the verified date above is unchanged: only T4037's section on identical properties was read for it): a note under the adjusted cost base box gives that section's average-cost rule for shares or fund units bought at different prices, and links this site's Stock Average Calculator. No figure changed.
Added 23 October 2026 (the verified date above is unchanged: only the sources named here were read that day, each from a copy saved that day): a note under each of the proceeds, adjusted cost base, losses and other-income boxes, and the words on the province box; the figures are unchanged, and the worked example now says what its adjusted cost base contains.
CRA guide T4037, Capital Gains (the 2025 edition, page dated 2026-02-11, read on 23 October 2026; the passages cited here, not the whole guide) says that proceeds of disposition are usually the sale price, that outlays and expenses of selling include commissions, brokers' fees, legal fees and transfer taxes, that the adjusted cost base is usually the cost plus the expenses of acquiring the property, such as commissions and legal fees, and also includes capital expenditures such as additions and improvements but not current expenses such as maintenance and repairs, that a gain or loss on property sold in a foreign currency is worked out by converting the proceeds at the rate in effect at the time of the sale, the adjusted cost base at the rate in effect when the property was acquired and the outlays and expenses at the rate in effect when they were incurred, that personal-use property includes a cottage, automobiles and boats and that a loss on it generally cannot be claimed, and that a loss on listed personal property (prints, etchings, drawings, paintings, sculptures and other similar works of art, jewellery, rare folios, rare manuscripts and rare books, stamps and coins) can only be deducted from gains on other listed personal property.
CRA's guide to the T5008 slip, T4091 (T4091(E) Rev. 26, page dated 2025-07-31, read on 23 October 2026: the passages on box 21) says that the proceeds in box 21 are the total received, that expenses are not deducted from them, and, in its example of a net credit to a bondholder's account, that bank charges are claimed as outlays and expenses on Schedule 3; the note about a statement that shows only the amount deposited applies that example and is not a statement of what any one broker's statement shows.
Income Tax Act, section 261 (current to 2026-09-30, last amended 2026-06-18, read on 23 October 2026): subsection (2) requires an amount expressed in another currency to be converted using the relevant spot rate for the day on which the amount arose, so the purchase and the sale each convert on their own day.
Section 41 (same dates and reading) nets listed personal property losses against listed personal property gains only, and paragraph 40(2)(g) (section 40, linked above, read again on 23 October 2026) makes a loss on personal-use property nil, with exceptions that include listed personal property. The note under "Your other income" describes this page's own model, not a rule of the Act: the box goes to the shared engine as gross employment income, with CPP, EI and the Canada Employment Amount worked out on it, and for pay those cancel out of the difference (the result note says so). Income of another kind added to the box is given those credits, and the enhanced CPP deduction, as if it were pay: over 7,280 cases (the thirteen jurisdictions, pay from $0 to $120,000 with $2,000 to $150,000 of other income added, and gains from $5,000 to $1,000,000), the tax this page shows on the gain was between $436.29 below and $88.56 above the shared engine's own figure for the same incomes with the added part taxed as income that earns no payroll credits (its personalTax function, with that part as otherIncome), which is the basis of the note's "a few hundred dollars";
tests/capital-gains-goldens.js reruns that comparison. The sentence on the Stock Average Calculator says it matches CRA's method only if each price includes its commission, because the guide's average cost includes the expenses of acquiring and that calculator's own page says it leaves commissions out unless they are added to a lot's price, and only if no shares were sold between purchases, because the guide's Example 1 takes a sale out at the average cost of the time. The other-income note borrows the return's own words for what to add or subtract:
CRA's page on the boxes of a T4 slip (2026-02-02, read on 23 October 2026: box 14 is employment income, entered on line 10100),
CRA's line 12000 page (2026-06-12, read on 23 October 2026: where there is no slip, the actual amount of eligible dividends is multiplied by 138% and of other dividends by 115% for line 12000),
the T1 return, form 5006-R (T1-2025, its form page dated 2026-09-04, read on 23 October 2026, Steps 2 to 4: lines 11300, 11400 and 11500 are the OAS pension, CPP or QPP benefits and other pensions, line 12000 is the taxable amount of dividends, line 12700 the taxable capital gains, line 12100 interest and other investment income, line 12600 net rental income and line 20800 the RRSP deduction) and
CRA's line 23600 page (2026-01-20, read on 23 October 2026: net income is line 15000 minus lines 20700 to 23500). The words on the province box come from
CRA's line 42800 page (2026-01-20, read on 23 October 2026: complete the form for the province or territory you were a resident of on December 31, 2025) and
the 2025 tax package page (2026-08-04, read on 23 October 2026: use the package for the province or territory where you lived on December 31, 2025); the label leaves out the year because this page's year is 2026, and does not state the exceptions the two pages give (a person who left Canada, who is taxed in the province where they lived on the day they left; a person who died; a person who lived outside Canada but kept residential ties; business income earned at a permanent establishment in another province).
Income Tax Folio S5-F1-C1 (2026-01-20, read on 23 October 2026: paragraphs 1.2 and 1.3) says that an individual is generally subject to provincial tax in the province where he or she is resident on December 31, and, for someone resident in two provinces on that day, in the one with the most significant residential ties.
A correction of 11 October 2026 (the verified date above is unchanged: the sources named in this paragraph were read on 11 October from the copies saved on 7 and 8 October, as were the capital losses page's passages and Income Tax Act sections 3 and 111 named above and sections 127.5, 127.51, 127.52 and 127.531 for the minimum-tax note, and no other source was re-read). Until this correction the page had one box for losses. It halved whatever was typed and took the result off the taxable gain, and it told anyone with a balance from a notice of assessment to type double that balance. Taking half of what was typed off the gain is right for a loss from this year, which is netted against the year's gains in computing income and so lowers net income. It was wrong for a net capital loss carried forward from an earlier year, which CRA says lowers taxable income and leaves net income unchanged (
the capital losses page, section on applying net capital losses of other years). The federal basic personal amount is worked out on net income (
CRA Form TD1, 2026 Personal Tax Credits Return, line 1: a net income from all sources greater than $181,440;
T4127, 122nd edition (page dated 2025-11-19), the BPAF formula, where NI is annual taxable income plus the prescribed-zone deduction), and so are Manitoba's (the BPAMB formula, the same NI, phasing out between $200,000 and $400,000), Yukon's (BPAYT is the federal formula) and British Columbia's tax reduction (
BC basic tax credits (tax reduction), last updated 20 April 2026: a net income threshold of $25,570 for 2026, the credit nil from $44,952; the 2025 Form BC428 also takes net income from line 23600). The Ontario Health Premium stays on taxable income (the Ontario Health Premium page, updated 22 January 2026, and the 2025 Form ON428, line 89). So for someone who had typed a carried-forward balance, whenever part of the stretch between their taxable income and their net income lay inside one of those ranges (net income from $181,440 to $258,482 for the federal and Yukon amounts, from $200,000 to $400,000 for Manitoba's, from $25,570 to $44,952 for British Columbia's), the old page understated the tax on the gain wherever the tax in question was payable at all, by at most $227.22 of federal tax, plus $103.87 more in Yukon, $1,704.24 more in Manitoba or $690.00 more in British Columbia (each is the lowest rate times the fall in the amount: 14% of the $1,623 by which the federal amount falls, 6.4% of the same $1,623 for Yukon's own credit, 10.8% of Manitoba's $15,780, and the whole $690 reduction); for a Quebec resident the federal part is at most $189.73, after the 16.5% abatement. Everyone else, including everyone who typed a loss from this year, gets the figure they always got. The page now has a box for each kind of loss, and the shared engine's computeTakeHome takes an optional netIncome for those four tests; without it every function in the engine returns exactly what it did before. The minimum-tax note also tells the two kinds of loss apart now: this year's losses come off its base in full and a carried-forward balance only at the amount deducted for the regular tax (until this correction it took both at the halved amount, so it could appear for a loss from this year when the minimum tax would not apply). The lifetime capital gains exemption section now says that claiming the exemption does not take a gain out of the minimum tax (section 127.52(1)(h)(ii), above).
Corrected on 24 October 2026 (the verified date above is unchanged; no figure changed): the result note and the explanation under the calculator said the payroll credits worked out on the other-income box “cancel out” of the tax on the gain. They do not cancel where the federal or the provincial tax without the gain is nil (the part your pay cannot use lowers the tax on the gain) or where Ontario's tax reduction or surtax differs between the two runs, each as on a return, so the figure was right and the words were loose. Both now say so, and this note replaces the words “cancel out” in the description of this page's logic above and in the 23 October entry.
How we verify every number → Cite as: Countworthy, “Capital Gains Tax Calculator (Canada)”, countworthy.com/canada/capital-gains-tax-calculator, formula last verified 8 October 2026.