A capital gain happens when you sell a capital property - like stocks, mutual funds, or real estate - for more than you paid for it. CRA does not tax 100% of your capital gain. A portion (the "inclusion rate") is added to your income and taxed at your marginal rate. The sale of your primary home is generally tax-free in Canada under the principal residence exemption. CRA requires you to report the sale on your return even if no tax is owed. If you sell a property for less than you paid, you have a capital loss. Capital losses can be applied against capital gains in the same year, carried back three years, or carried forward indefinitely. Keep all records of your investment purchases and sales - including the adjusted cost base (ACB) of investments.