Can a capital gains deduction be used when a Capital reserve has been applied in the same tax year?
When I go through the steps in TaxCycle, depending on the numbers, both seemed to apply. I would say, Yes.
Capital gains reserve is based on the fact that the seller does not receive the full proceeds upon sale, but over a number of future years. That fact does not preclude the taxpayer from claiming the capital gains exemption on the portion that is taxable each year.