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Gold/Mining/Energy : TAXES, TAXATION, TAX and Canadian stocks
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To: Johnny Canuck who wrote (508)4/25/2002 7:03:24 AM
From: stan_hughes  Read Replies (1) of 548
 
Harry and Miner - You're partly right, CNIL did apply to capital gains on e.g. stocks, but the concept was superceded when Canada dropped the capital gains exemption.

The CNIL rules used to cut you off from claiming a capital gains exemption insofar as you had a CNIL balance built up from claiming amounts in the past that qualified as investment losses (e.g. interest, carrying charges). It's not an issue with your current calculations because there's no more personal capital gains exemption in Canada.

Bear with me a bit here.

Consider the T1 form design and the order in which calculations must be made. When you have a capital gain, you first report it as income. In the days of the capital gains exemption, you claimed that deduction in a susbsequent section, and for most people, it was the same amount, i.e. the figure just went in and out, with no impact on taxable income.

However, if you had a CNIL balance, the allowable amount of that gains exemption was reduced by the amount of that CNIL balance. For many people, this meant having to report their gains but not being able to claim a full (or in some cases any) deduction, resulting in partial or full taxation of the gain.

I could bore you with a long story about why CNIL was originally brought in by RevCan, but there isn't much point in my doing that since Canada's exemption concept is gone. The current "pay as you play" system is much simpler.
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