A capital gain is when you sell a stock for more than you paid for it. The entire capital gain must be reported as income on your tax return and is taxed at a rate of 50% of net capital gains – the total amount of capital gains minus any capital losses if you sold any stocks for less than you paid in the same year. If you receive capital gains from investments outside Canada, the equivalent Canadian dollar value must be reported on your Canadian tax return and will be taxed accordingly.
Investments held and sold in a tax-deferred registered account – such as an RRSP – are not taxed until you withdraw them. At the time of withdrawal, they are taxed as income.
Learn more about tax and investing, and speak to a qualified tax professional for information related to your personal financial situation and questions related to how tax is applied to registered plans.