How do I fill out Schedule 3 for capital gains, line by line?
On the 2025 Schedule 3, the latest CRA version as of October 2026, you list each disposition in Part 3 by property type (proceeds, ACB, outlays, gain or loss), add slip gains and reserves in Part 4, then multiply the total by the 50% inclusion rate in Part 5 and carry a positive result to line 12700.
Which Part 3 line does each kind of property go on?
Part 3 of the 2025 Schedule 3 has ten property type lines. For each disposition you enter the year acquired, the proceeds, the adjusted cost base and the outlays and expenses, and the gain or loss is proceeds minus the other two canada.ca. As of October 2026 the CRA lists only the 2025 version; the 2026 schedule isn't published yet
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| Part 3 line | Property type | Total proceeds line | Gain or loss line |
|---|---|---|---|
| 1 | Qualified small business corporation shares | 10699 | 10700 |
| 2 | Qualified farm or fishing property | 10999 | 11000 |
| 3 | Farm or fishing property: mortgage foreclosures and conditional sales repossessions | 12399 | 12400 |
| 4 | Publicly traded shares, mutual fund units, other shares | 13199 | 13200 |
| 5 | Real estate, depreciable property, other properties | 13599 | 13800 |
| 6 | Bonds, debentures, promissory notes | 15199 | 15300 |
| 7 | Crypto assets | 15200 | 15301 |
| 8 | Other mortgage foreclosures and conditional sales repossessions | 15499 | 15500 |
| 9 | Personal use property | none | 15800 (gain only) |
| 10 | Listed personal property | none | 15900 (net gain only) |
Shares and fund units your client sold come with a T5008 slip or an account statement, and they go on line 4 canada.ca. The slip's cost figure is not always your client's ACB; the T5008 reporting page covers the box by box match. A cottage is personal use property and goes on line 9, not line 5, and a rental building sale needs the price split between land and building, each reported separately
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Lines 1 and 2 feed the lifetime capital gains exemption, so a qualified small business share sale belongs on line 1, not line 4. Report every disposition under its property type; the T4037 guide doesn't allow lumping them together canada.ca.
How do Parts 4 and 5 turn the Part 3 total into line 12700?
Part 4 starts from line 11, the sum of the ten Part 3 lines, and adds the gains that never pass through Part 3. Part 5 applies the inclusion rate canada.ca.
| Schedule line | Federal line | What goes there |
|---|---|---|
| 12 | none | Line 11 total from Part 3 |
| 13 | 16100 | Deferral on eligible small business corporation shares included on line 4 (subtracted) |
| 15 | 17400 | Capital gains or losses from T5, T5013 and T4PS slips |
| 16 | 17600 | Capital gains or losses from T3 slips |
| 18 | 17800 | Capital loss from a reduction in a business investment loss (subtracted) |
| 19 | 19100 | Total gains or losses before reserves |
| 20 | 19200 | Reserves brought into income, or deducted, from Form T2017 |
| 21 | 19700 | Total capital gains or losses |
| 23 and 24 | none | Inclusion rate of 50%, applied to line 21 |
| 25 | 19890 | Certain partnership interest gains included at 100% |
| 26 | 19900 | Total taxable capital gains or net capital loss |
A positive line 19900 goes to line 12700 of the return canada.ca. Slip gains are the trap: most capital gains on a T3, T5 or T5013 belong on line 17400 or 17600, but gains the slip flags as qualified small business shares or farm or fishing property go on line 10700 or 11000 so they can support an exemption claim
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Line 19200 is the net of last year's reserve and this year's reserve from Form T2017. How much your client can defer is on the capital gains reserve page. The 50% rate is the one in force for 2025 and 2026, since the two thirds increase was cancelled; see the inclusion rate for 2026.
How do shares, crypto, a painting and a T3 slip flow to line 12700?
Your client sold shares in 2025 for $48,000 (T5008 box 21) with a $30,000 ACB and a $50 commission. They sold crypto for $12,000 with a $20,000 ACB, and a painting for $3,000 that cost $5,000. Their T3 slip shows a $1,400 capital gain. They have a $3,000 net capital loss carried forward from 2023.
| Line | Calculation | Amount |
|---|---|---|
| 4 / 13200 | $48,000 minus $30,000 minus $50 | $17,950 |
| 7 / 15301 | $12,000 minus $20,000 | ($8,000) |
| 10 / 15900 | Painting loss of $2,000, net gain only | $0 |
| 11 | $17,950 minus $8,000 | $9,950 |
| 16 / 17600 | T3 capital gain | $1,400 |
| 21 / 19700 | $9,950 plus $1,400 | $11,350 |
| 26 / 19900 | $11,350 × 50% | $5,675 |
| T1 line 12700 | Taxable capital gain | $5,675 |
| T1 line 25300 | 2023 net capital loss applied | $3,000 |
The crypto loss nets against the share gain inside Part 3. The painting loss doesn't: listed personal property losses only offset listed personal property gains, so line 15900 shows nil and the $2,000 waits for an LPP gain in the three years before or the seven years after canada.ca.
The $3,000 carryforward is not entered on Schedule 3. It's claimed on line 25300 against the taxable capital gain, and earlier years' losses are used before later ones canada.ca. Carryback and carryforward planning is on the net capital loss carryover page.
What do Parts 1 and 2 ask about real estate?
Part 1 asks at line 17905 whether your client sold a housing unit in Canada, including a rental, that they owned for less than 365 consecutive days. If yes and none of the nine life events at line 17906 apply, the gain is business income on Form T2125, not a capital gain canada.ca. The property flipping rule page lists the exceptions.
Part 2 is for a home sold under the principal residence exemption. You tick one box at line 17900 and attach Form T2091(IND), or Form T1255 for a deceased client canada.ca.
| Line 17900 box | When to tick it |
|---|---|
| Box 1 | Designated for every year owned, or every year but one |
| Box 2 | Designated for some but not all years owned |
| Box 3 | Several properties designated, for some or all years |
The sale has to be reported even when the whole gain is exempt. The formula and the cottage case are on the principal residence exemption page.
Which losses never reduce the net figure?
Personal use property: a loss is usually not deductible, which is why line 15800 takes gains only canada.ca. The ACB and the proceeds are each deemed to be at least $1,000 under ITA subsection 46(1)
laws-lois.justice.gc.ca, so a $700 sale of an item that cost $600 produces no gain at all.
Depreciable property: a loss on a building or equipment is not a capital loss. It may be a terminal loss instead, deductible in full against other income canada.ca. See recapture and terminal loss.
Superficial losses: a loss on a security bought back by your client or an affiliated person, such as a spouse, within 30 calendar days before or after the sale is denied and usually added to the ACB of the new property canada.ca. The superficial loss rule page has the details. Enter the gain or loss column after that adjustment, not the raw broker figure.
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What do I do if line 19900 is negative?
Leave line 12700 blank. The net capital loss shows on the notice of assessment and can be carried forward with no time limit, or carried back to 2022, 2023 or 2024 with Form T1A canada.ca.
Does my client have to report a sale if no tax is owed?
Yes. The CRA says a return must be filed to report the disposition even when there's no tax to pay canada.ca. For a home sale, skipping it can cost the principal residence exemption.
What counts as outlays and expenses in column 4?
Costs of selling the property: fixing up expenses, finders' fees, commissions, brokers' fees, surveyors' fees, legal fees, transfer taxes and advertising canada.ca. They reduce the gain only; they can't be deducted from other income.
How do I convert a US dollar sale?
Convert the proceeds at the exchange rate on the date of sale, the ACB at the rate when the property was bought, and the outlays at the rate when they were paid canada.ca. The currency swing itself can be part of the gain; see foreign exchange gains.
General information for the tax year shown, not advice for a specific client. Confirm the facts before you file or remit.