TP-726.20.2-V: Capital gains deduction on resource property

What’s in this article?

 

What is this?

Form TP-726.20.2 is used to calculate the capital gains deduction that you may be entitled to if you disposed of resource property during the year. A resource property may be a flow-through share, an interest in a partnership that invested in flow-through shares, or resource expenses incurred after May 14, 1992. If you sold your resource property during the year and realized capital gains on it, use form TP-726.20.2 to determine if you are entitled to a capital gains deduction and if applicable, calculate the deduction amount.

Complete a separate form for each resource property that you sold. The calculated capital gains deduction amount transfers to line 292 of your Québec tax return.

 

Am I eligible?

If you realized capital gains on disposition of resource property during the year, you may be able to claim a deduction on the capital gains if:

  • You were resident in Canada in the tax year, or were resident in Canada for part of the year and the entire previous year, or plan to be resident in Canada all of the next year;
  • The amount of the limit on your exploration expenses incurred in Québec (line 52) was positive; and
  • You report the capital gains no later than one year after the deadline for filing your tax return for the year.

Revenu Québec says…

You are not entitled to a capital gains deduction on resource property if the flow-through shares or partnership interests were acquired before May 15, 1992, or issued and acquired between June 13, 2003, and March 30, 2004, except if they were issued following an application for a receipt for a final prospectus (or for an exemption from filing a prospectus) made before June13, 2003. In calculating the deduction, you cannot include the expenses incurred in Québec with regard to these flow-through shares or partnership interests

If the property sold is also qualified farm property, qualified fishing property or qualified small business corporation shares, you may not claim the capital gains deduction on resource property for that property unless you have used up the capital gains deduction on qualified property.

Click this link for information on capital gains deduction on qualified property (qualified farm, qualified fishing, or qualified small business corporation shares).

 

Where do I claim this?

Follow these steps in H&R Block’s tax software to file your 2015 taxes:

Important: Before you begin, ensure that you told us that you lived in QUÉBEC on December 31st of the 2015 tax year, in H&R Block’s tax software. To do this:

  1. Click the HOME tab.
  2. Click the ABOUT YOU icon, and click the Your residence link. You will find yourself here:

Once you have confirmed your residence location, complete form TP-726.20.2-V by following these steps:

  1. Click the PREPARE tab.
  2. Click the YOUR YEAR IN REVIEW icon. You will find yourself here:
  3. Click the checkbox labelled I had investments.
  4. Scroll to the bottom of the page and click Continue.
  5. Click the RRSPS AND INVESTMENTS icon. You will find yourself here:
  6. Under the RESOURCE INCOME AND CREDITS heading, click the checkbox labelled Capital gains deduction on resource property (TP-726.20.2-V).
  7. Click Continue.

When you arrive at the page for Capital gains deduction on resource property (TP-726.20.2-V), enter your information into the tax software.

 

Where can I learn more?