knowledge topics
Capital Gains for Investors
KNOWLEDGE EXPECTED OF: Both CFP® Professionals and QAFPTM Professionals
Capital Property
- Define Valuation Day.1
- Identify factors that the Canada Revenue Agency considers when determining whether property is capital property, such as:
- Intention at purchase date
- Frequency of disposition
- Identify that property acquired for the purpose of generating income may be disallowed by the Canada Revenue Agency as capital property.
- Define types of capital property, such as:
- Non-depreciable capital property
- Personal use property2
- Listed personal property3
- Other property
- Depreciable capital property4
- Eligible capital property5
- Non-depreciable capital property
Acquisition and Disposition of Property
- Identify when the Canada Revenue Agency considers that an individual has disposed of property.6
- Define terms associated with the acquisition and disposition of property, such as:
- Adjusted cost base7
- Deemed acquisition8
- Deemed cost9
- Fair market value10
- Proceeds of disposition11
- Deemed proceeds of disposition12
- Undepreciated capital cost (for depreciable property)13
- Outlays and expenses14
- Inclusion rate15
- Inadequate consideration
- Explain when inadequate consideration applies to the disposition of property.
- Explain the tax impact of inadequate consideration.
- Define types of dispositions, such as:
- Actual disposition
- Voluntary disposition16
- Involuntary disposition16
- Deemed disposition17
- Actual disposition
- Define former business property (FBP).16
- Explain ways in which former business property may be disposed.16
- Involuntary
- Voluntary
- Explain the eligibility requirements for property to qualify as replacement property under the replacement property rules.16
Capital Gains
- Define values associated with capital gains, such as:
- Capital gain18
- Taxable capital gain19
- Explain the impact of a capital gain when property is transferred between spouses or common-law partners on:
- Taxation
- Adjusted cost base
- Calculate the capital gain and taxable capital gain resulting from the disposition of capital property.
- Non-depreciable capital property
- Personal use property20
- Listed personal property21
- Other property22
- Depreciable capital property23
- Non-depreciable capital property
- Explain the income tax impact to an individual from a capital gain.
- Estimate the income tax impact to an individual from a capital gain.
Principal Residence Exemption
- Identify criteria for a property to qualify as a principal residence in Canada.24
- Identify that a process exists for claiming the principal residence exemption.
Glossary of Verbs (mouse over to see definition)
-
Define
To state exactly the meaning of
-
Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
-
Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
-
Compare
To note the similarities and differences between two or more things
-
Estimate
To determine an approximate value for
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Calculate
To find the value using mathematics
-
Convert
To change from one form or purpose to another
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Evaluate
To reach a conclusion or make a judgement through careful study
-
Interpret
To give the meaning of / to construe or understand / to translate orally

REFERENCES
- http://www.cra-arc.gc.ca/E/pbg/tf/t2076/README.html
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/cmpltng/prsnls/menu-eng.html
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/cmpltng/lstd/menu-eng.html
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/glssry-eng.html#depreciableproperty
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/glssry-eng.html#eligibleCapitalproperty
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/gns/whn/menu-eng.html
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/glssry-eng.html#adjustedcostbase
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/glssry-eng.html#deemedacquisition
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/glssry-eng.html#deemedcost
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/glssry-eng.html#fairmarketvalue
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/glssry-eng.html#proceedsofdisposition
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/glssry-eng.html#deemedproceedsofdisposition
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/glssry-eng.html#undepreciatedcapitalcost
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/glssry-eng.html#outlaysandexpenses
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/glssry-eng.html#inclusionrate
- https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/report-business-income-expenses/claiming-capital-cost-allowance/replacement-property.html
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/glssry-eng.html#deemeddisposition
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/glssry-eng.html#capitalgain
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/glssry-eng.html#taxablecapitalgain
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/cmpltng/prsnls/menu-eng.html
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- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/cmpltng/rlstt/dprcbl-eng.html
- http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/rsdnc/wht/hw-eng.html