Updated: 2024-12-03
In the 2024 federal budget, the Department of Finance announced an increase to the capital gains inclusion rate from one half (1/2) to two thirds (2/3) for capital gains realized after June 24, 2024. This increase applies to all types of corporations. However, an individual, a graduated rate estate (GRE) or a qualified disability trust (QDT) are eligible to have a reduced inclusion rate applied to their capital gains under the $250,000 threshold from the basic inclusion rate of two thirds to one half.
For detailed information on the proposed legislation and explanatory notes, please refer to the Notice of Ways and Means Motion from September 2024. See also the CDA and the Capital Gains Inclusion Rate help topic.
As of the date of writing this documentation, the increased inclusion has not yet been enacted. However, the Canada Revenue Agency (CRA), Alberta Finance and Revenu Québec have committed to administering the new capital gains inclusion rate for T2, AT1 and CO-17 returns. If a taxpayer chooses to continue to use the 1/2 inclusion rate, an amended return will need to be filed at a later date when the rate increase is enacted.
When you create a new T2 return, or open or carry forward an existing T2 return, TaxCycle continues to calculate capital gains using the 1/2 inclusion rate. If a corporation's tax year includes June 25, 2024, (for example, January 1, 2024, to December 31, 2024) and there are dispositions after June 24, 2024, the new inclusion rate of 2/3 applies. If the corporation's tax year starts after June 24, 2024, the new inclusion rate of 2/3 also applies.
To apply the new 2/3 capital gains inclusion rate in TaxCycle T2:
