How do you calculate and report capital gains or losses when you redeem units or shares?

When you redeem your mutual fund units or shares, you may have a capital gain or a capital loss. Generally, 50% (1/2) of your capital gain or capital loss becomes the taxable capital gain or allowable capital loss.

Use lines 131 and 132 of Schedule 3, Capital Gains (or Losses), to calculate and report all your capital gains and capital losses from your mutual fund units and shares. List the information for each mutual fund separately.  Multiple redemptions from the same fund in the same year should be grouped together.

To calculate your capital gain or your capital loss, you need to know the following three amounts:

• the proceeds of disposition, which is the amount you received or will receive for your units or shares;
• the adjusted cost base (ACB), which is the cost of your units or shares, plus any expenses you incurred to acquire them, such as commissions and legal fees; and
• the outlays and expenses you incurred when selling your units or shares, such as redemption fees and commissions. 

Forms and publications

• Guide T4037, Capital Gains
• Information Sheet RC4169, Tax Treatment of Mutual Funds for Individuals
• Schedule 3, Capital gains (or losses)