Canada Capital Gains Tax Calculator

Adjusted Cost Base (ACB) is generally what you paid to acquire an asset, plus the cost of improvements, minus any returns of capital. For identical properties (e.g., shares of the same stock bought at different times), you must average the cost of all identical units to determine the ACB per unit. ACB is used to calculate your capital gain or loss when you sell.

The capital gains inclusion rate is the percentage of a capital gain that is taxable. In Canada, 50% of a capital gain is typically included in income (the inclusion rate is 50%). This means only half of the gain is added to your taxable income and taxed at your marginal rate. The inclusion rate can change by law; this calculator lets you adjust it.

Your marginal tax rate is the rate of tax you pay on your next dollar of taxable income. It combines federal and provincial/territorial rates and increases as your income rises through successive tax brackets.

Capital gains are not taxed at a separate flat rate. Instead, the taxable portion of your gain — calculated as your total gain multiplied by the inclusion rate — is added to your other income for the year (employment income, investment income, RRSP withdrawals, etc.). Your marginal rate is then applied to that combined total.

This matters because a significant capital gain can push your total income into a higher bracket than your other income alone would reach. For example, if your employment income puts you at a 33% marginal rate but a large capital gain pushes your total income higher, part of that gain may be taxed at 43% or more, depending on your province.

To find the bracket thresholds and combined federal + provincial rates that apply to your situation, see the Canada Income Tax Brackets — Federal and Provincial reference page. To estimate your marginal rate based on your total projected income, use the Canada Personal Income Tax Calculator.

If your proceeds are less than your ACB, you have a capital loss. Capital losses do not reduce tax on a per-sale basis; instead, they can be used to offset capital gains in the same year or carried back or forward to other years under CRA rules. This calculator treats a loss as: taxable gain = 0, tax owing = 0, and after-tax proceeds = proceeds (you keep the full amount you received).

The primary residence exemption can reduce or eliminate tax on a gain from selling your principal home. Real eligibility depends on CRA rules: you generally must have owned and inhabited the property as your principal residence for the years in question, subject to specific conditions and limitations. The toggle in this calculator is for educational illustration only and does not constitute tax advice. Consult CRA guidance or a tax professional to determine your actual eligibility.