Taxpayers who claimed the lifetime capital gains exemption (LCGE) on their 2024 tax returns and who were incorrectly assessed should soon be reassessed.
The Canada Revenue Agency (CRA) informed CPA Canada that reassessments are forthcoming following a delay, Ryan Minor, director of tax with CPA Canada, wrote in a LinkedIn post on Tuesday. “There has been a delay in timelines previously communicated, but we expect to begin reassessing impacted returns shortly,” the tax agency told CPA Canada.
The CRA previously said it identified and resolved two unspecified issues causing incorrect assessments of some T1 tax returns claiming the LCGE, resolving the issues on April 21 and May 22, respectively. The agency had said no action was required by taxpayers and that it would proactively reassess affected returns — beginning on June 10.
However, “practitioners have since reported that the CRA has not yet reassessed any of their affected clients,” Minor said in his Tuesday post. In an email, a CPA Canada spokesperson said the organization received roughly a couple dozen inquiries about the issue from its members.
Reassessing affected returns “remains a high priority for the agency,” the CRA told CPA Canada.
The LCGE, available for gains on the sale of small business shares and farming and fishing property, increased to $1.25 million from $1,016,846, effective June 25, 2024 — the date the defunct proposed increase to the capital gains inclusion rate was originally slated to take effect. T1 and T3 schedules maintained the reporting of capital gains before June 25 and after June 24 of last year in line with the proposal and LCGE increase.
CRA statistics to July 21 indicate that a total of 31.8 million T1 returns for the 2024 tax year have been assessed during the 2025 filing season.