--- title: "Investment Income and Capital Gains on a Canadian Return" url: https://www.everstonecpa.com/investment-income-and-capital-gains description: "Investment income and capital gains on a Canadian return: how interest, dividends and gains are taxed differently. See what the slips leave out." type: service-or-info updated: 2026-10-08 summary: "Interest is taxed at full rates, eligible and non-eligible dividends are grossed up and credited at different rates, and only part of a capital gain is included in income. The slips report proceeds but generally not your adjusted cost base, which is what decides the gain — and holding foreign property above a cost threshold triggers a separate filing." faq_count: 4 publisher: EverStone CPA Inc., a Chartered Professional Accountant firm registered with CPA British Columbia and CPA Alberta service_area: British Columbia, Alberta, Ontario and Manitoba language: en-CA contact: info@everstonecpa.com · https://www.everstonecpa.com/book-online --- [Home](https://www.everstonecpa.com/) [Personal tax](https://www.everstonecpa.com/personal-taxes) Investment income and capital gains Personal tax · Investments # Investment income and capital gains Updated 8 October 2026 Three kinds of investment income are taxed three different ways, and the slips you receive do not carry everything the return needs. What is missing is usually the cost base. [Get My Fixed Quote](https://www.everstonecpa.com/book-online) [All personal tax services](https://www.everstonecpa.com/personal-taxes) **Quick answer:** Interest is taxed at full rates, eligible and non-eligible dividends are grossed up and credited at different rates, and only part of a capital gain is included in income. The slips report proceeds but generally not your adjusted cost base, which is what decides the gain — and holding foreign property above a cost threshold triggers a separate filing. ## What is included - **Interest, dividends and capital gains reported correctly**, each on its own basis. - **Adjusted cost base worked out**, including reinvested distributions the slips do not show. - **Capital losses applied**, carried back or forward where that is worth more. - **Foreign income and the T1135** where foreign property crosses the threshold. - **Eligible against non-eligible dividends**, which are credited at different rates. - **Coordination with the corporate return** where the investments are held corporately. ## Investment income: the cost base is what goes missing A [T5008](https://www.everstonecpa.com/forms/t5008) reports what you sold and for how much. It frequently does not report what you paid, and where it does, it may not include reinvested distributions that raised your cost base over the years. Filing the slip as issued therefore overstates the gain, sometimes substantially, and the CRA has no way to know. Keeping the cost base is the investor’s job, not the broker’s. Where it has not been kept, reconstructing it is possible but takes time, and it is worth doing before a large disposition rather than after. ## Capital gains held personally or in the corporation Investment income earned inside a corporation is taxed differently from the same income earned personally, and above a threshold it reduces the small business deduction on the operating income. [Investment income in a corporation](https://www.everstonecpa.com/blog/investment-income-in-a-corporation-canada) covers the mechanics, and it is a decision worth taking deliberately rather than by default. ## Who this is for, and who it is not **A good fit:** anyone with a non-registered portfolio, a disposition to report, foreign holdings above the reporting threshold, or a cost base nobody has tracked. **Not a fit:** someone whose investments sit entirely inside registered accounts, where nothing is reportable until money comes out. In either case we say so on the first call rather than quoting for work you do not need. ## Common questions about investment income **Do I have to report a loss?** Yes, and you want to. A capital loss offsets capital gains in the year, can be carried back three years or forward indefinitely, and is lost entirely if never reported. [Ask us →](https://www.everstonecpa.com/quick-question) **What is the T1135 threshold?** It applies where the total cost of specified foreign property exceeds the threshold at any point in the year. Cost, not market value, which catches people whose holdings have fallen. **Are US dividends treated the same?** No. They do not qualify for the Canadian dividend tax credit and are generally subject to withholding, which may be creditable. The treaty and the account type both matter. **Does crypto count?** It is property, so disposing of it is a taxable event, including trading one coin for another. Whether a gain is capital or business income depends on the pattern of activity. ## Other personal tax work The rest of what this covers, and the page each one is on. [Self-employed returns Self-employed tax returns: the T2125 statement inside your T1, what is deductible, instalments, CPP…](https://www.everstonecpa.com/self-employed-tax-return) [Rental income Rental property on a Canadian tax return: what is deductible, current against capital, the CCA…](https://www.everstonecpa.com/rental-income-tax-return) [All personal tax Personal taxes for Canadian owners: T1 returns covering self-employment, rental property and…](https://www.everstonecpa.com/personal-taxes) ### Starting fees Every fee is fixed in writing before any work begins. - **Personal tax return (T1)** from $125; self-employed or rental $275–$500 *This page* - **Monthly bookkeeping, GST/PST filing included** from $325 a month - **Payroll, remittances, T4s and ROEs** included in monthly bookkeeping - **Books, payroll and the year-end T2 together** $500–$700 a month - **Corporate year-end and T2 return** fixed fee, quoted in writing - **Catch-up bookkeeping** from $2,200 per year of records - **Controller or CFO support** controller from $1,650, CFO from $2,750 a month - **One-off advice call with a CPA** $225 plus GST [Get My Fixed Quote](https://www.everstonecpa.com/book-online?service=personal#enquiry-form) ## Talk to a CPA about this One Chartered Professional Accountant, start to finish. Fixed fees, quoted in writing before any work begins, and no obligation from a first conversation. [Get My Fixed Quote](https://www.everstonecpa.com/book-online) [Ask a Free Question](https://www.everstonecpa.com/quick-question) Email info@everstonecpa.com ★★★★★ “…have been completing my bookkeeping, taxes and financials for the last 2 years and they have been amazing. Thank you!” R. H. · Google review --- Source: https://www.everstonecpa.com/investment-income-and-capital-gains Prices: https://www.everstonecpa.com/pricing · Contact: info@everstonecpa.com · https://www.everstonecpa.com/book-online