Capital gains inclusion rate
The capital gains inclusion rate is the fraction by which you multiply a capital gain, capital loss or business investment loss for the year to find the taxable capital gain, allowable capital loss or allowable business investment loss. The rate for the year in question applies.
The inclusion rate is the share of a capital gain that is added to income. Anyone selling shares or other capital property meets it, and it also applies to capital losses. Because it is a rate for the year, always confirm the one that applies to the year of sale.
How the CRA defines it
The CRA’s guide T4037 says the inclusion rate is the fraction by which you multiply your capital gain, capital loss or business investment loss for the year. It also points to a separate section for previous years’ rates. The Income Tax Act deals with taxable capital gains and allowable capital losses in Subdivision C, starting at section 38.
What to ask
- Which year’s rate applies to the date of the sale?
- Does a deduction such as the lifetime capital gains exemption apply?
- Are there capital losses to apply against the gain?
Read how capital gains are taxed on a sale and the lifetime capital gains exemption.
Sources
This definition is checked against primary sources. Links were last confirmed on the dates shown.
- 01Canada Revenue AgencyGovernmentCapital Gains – 2025
- 02Government of CanadaGovernmentIncome Tax Act, R.S.C. 1985, c. 1 (5th Supp.)
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