The distinction between a capital property (a property giving rise to a capital gain) and an eligible capital property (a property giving rise to an eligible capital amount) is circular: under ss. 14(1) and 14(5) - CEC-(E), an eligible capital amount is 1/2 of an amount receivable on capital account in respect of a business that is not included in computing a capital gain; and under s. 39(1)(a)(i), a capital gain does not include gain from the disposition of an eligible capital property.
When asked whether a capital property includes an eligible capital property, CRA did not directly discuss this circularity issue, and stated:
By virtue of subparagraph 39(1)(a)(i)…the gain from the disposition of an "eligible capital property" is excluded from the meaning of a taxpayer's “capital gain”... .