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Carrying Losses Forward
If you don’t have capital gains in either the current tax year or any of the previous three, you may opt to carry your losses forward. Each year, the accumulated value of your capital losses becomes your net capital losses, which you may carry forward indefinitely.
If you have not claimed your net capital losses by the time of your death, your representative can apply them to your final return to offset your capital gains for that year.
Variable Rules on Carrying Losses Forward
In most cases, you can only use capital losses to offset capital gains. There are, however, a few exceptions to this rule. For example, if you have allowable business investment losses (ABIL) or certain farming losses, you can claim them against your income.
You may carry an ABIL back three years or forward ten years, and claim it against regular income. If you have not claimed it within that time period, the ABIL becomes part of your net capital losses, which can only be claimed against capital gains.
**Note: You can carry farm losses forward up to 20 years.
For Carrying Losses Forward:
Capital losses can be carried forward indefinitely and so are never lost.
- To do this, enter the amount you are claiming as a deduction on line 25300 of your income tax return ( T1).
- To claim the correct amount, you will need to be aware of the inclusion rate for the year of your loss.
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