Capital Gains Tax Calculator 2026: 50% / 66.67%

Frequently asked questions

How are capital gains taxed in Canada?

Only a portion of your capital gain is taxable. For individuals, the first $250,000 of annual capital gains has a 50% inclusion rate, and amounts above $250,000 have a 66.67% inclusion rate (effective June 25, 2024). The taxable portion is added to your regular income and taxed at your marginal rate. For example, a $100,000 gain with a 50% inclusion means $50,000 is added to your income.

What is the Principal Residence Exemption?

If you sell a property that was your principal residence for every year you owned it, the entire capital gain is exempt from tax. If you designated it as your principal residence for only some of the years, a partial exemption applies using the formula (years designated + 1) / years owned. You can only designate one property as your principal residence per year.

Can I use capital losses to reduce my taxes?

Yes. Capital losses can only be applied against capital gains (not regular income). If your losses exceed your gains in a year, you can carry the net loss back 3 years or forward indefinitely to offset gains in other years. The superficial loss rule prevents you from claiming a loss if you repurchase the same or identical investment within 30 days (before or after the sale).

What is the Lifetime Capital Gains Exemption (LCGE)?

The LCGE allows Canadian residents to exempt a significant amount of capital gains from the sale of qualifying small business corporation shares, or qualifying farm or fishing property. This exemption is indexed to inflation and increases annually. Check the CRA for the current limit.

How do I calculate my Adjusted Cost Base (ACB)?

Your ACB is the total cost of acquiring the asset, including the purchase price, commissions, legal fees, and any capital improvements. For stocks purchased at different times, use the average cost method: total cost of all shares divided by total number of shares. Return of capital distributions reduce your ACB, and selling expenses (realtor fees, legal costs) reduce your capital gain.

How does this calculator work?

The calculator estimates the tax on your capital gains based on your province, total income, and the type of asset sold. Enter the proceeds (sale price), adjusted cost base (ACB), and any selling expenses to calculate your net capital gain. It applies the appropriate inclusion rate and adds the taxable portion to your other income to determine the marginal tax rate. It also supports the Principal Residence Exemption (PRE) for qualifying homes and the Lifetime Capital Gains Exemption (LCGE) for qualifying small business shares and farm property.