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How do you calculate a reserve

The reserve you can claim in a tax year depends on when you disposed of the property and the type of property you disposed
of. You do not have to claim the maximum reserve in a tax year(Year A). However, the amount you claim in a later year
(Year B) cannot be more than the amount you claimed for that property in the previous year (Year A). To determine your
maximum reserve for 2023, use the calculation below that applies to you.

Dispositions of capital property after November 12, 1981

If you disposed of property after November 12, 1981, the calculation you use will depend on the type of property and disposition.

All property (other than family farm or fishing property, and small business corporation shares disposed to your child, as well
as donated non-qualifying securities)

You can claim a reserve up to a maximum of four years. Your reserve in each year cannot be more than the lesser of the
following:

Year of disposition (A)

Year after the disposition (B)

(i)

Capital gain

Amount payable after the end of the year

1st year: 60%

3rd year: 20%

Proceeds of disposition

80%

2nd year: 40%

4th year: zero

(ii)

Capital gain

(Enter the applicable percentage)

Family farm property, family fishing property, and small business corporation shares disposed to your child

You can claim a reserve up to a maximum of nine years. Your reserve in each year cannot be more than the lesser of the
following:

Year of disposition (A)

Year after the disposition (B)

(i)

Capital gain

Amount payable after the end of the year

1st year: 80%

4th year: 50%

7th year: 20%

Proceeds of disposition

90%

2nd year: 70%

5th year: 40%

8th year: 10%

3rd year: 60%

6th year: 30%

9th year: zero

(ii)

Capital gain

(Enter the applicable percentage)

Gift of non-qualifying security (other than an excepted gift) to a qualified donee

You can claim a reserve for any tax year ending within 60 months after the time you made the gift. However, you cannot claim
a reserve for a gift of non-qualifying securities for the year in which the donee disposes of the securities, or the security ceases
to be a non-qualifying security, or for any following year. Your reserve in each year cannot be more than the amount of the
capital gain you realized from the making of the gift.

For gifts of non-qualifying securities, the reserve you can claim cannot be greater than the eligible amount of the gift.

Dispositions of capital property before November 13, 1981

If you sold property before November 13, 1981, use the calculation below to determine your reserve. You should also use the
calculation for property that you sold, or are considered to have sold, after November 12, 1981, if the disposition occurred in
one of the following situations:

•

under the terms of an offer or a written agreement made or entered into before November 13, 1981

•

as a result of the property having been stolen, destroyed, or expropriated before November 13, 1981

Capital gain

Amount payable after the end of the year

Proceeds of disposition

For more information and definitions of terms used in this form, see Guide T4037, Capital Gains.

See the privacy notice on your return.

T2017 E (23)

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