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How do I carry back a net capital loss from my stocks, bonds, or mutual funds?

by TurboTax•4• Updated 3 weeks ago

If you sell capital properties such as stocks, bonds, mutual funds or crypto assets for more than what you paid, you have a capital gain. If they sell for less than what you paid, you have a capital loss. 

On a tax return, 50% (the inclusion rate) of a capital gain becomes a taxable capital gain and 50% of a capital loss becomes an allowable capital loss. Allowable capital losses can be applied against your taxable capital gains to reduce your income and tax owing. If after that there’s any allowable capital loss left over, it becomes part of your net capital loss pool for the year.

You can carry back your net capital losses up to three years, or forward to any future year, to reduce taxable capital gains from those other years. Any available taxable capital gains will be shown on your prior year’s Notice of Assessment or Notice of Reassessment.

Here's how to carry back a net capital loss in TurboTax.

  1. From Tax Home, under Add to your return, enter Losses and select Losses Profile.
  2. At Your Losses Profile for 2024, select Request for Loss Carryback.
  3. Select Continue until you reach Net Capital Loss Carrybacks.
  4. The maximum net capital loss that you can carry back is listed. Enter the amount you want to carry back for each applicable year, then continue.

You've now carried back your net capital loss. TurboTax includes your T1A Request for Loss Carryback with your return. The CRA will action your request in due course. Your carryback amounts won't affect the current tax year's tax return.

  1. Select Find and enter losses in the search bar.
  2. Select Losses from the search results, then Go.
  3. Select the Request for Loss Carryback box.
  4. Select Continue until you reach Net Capital Loss Carrybacks.
  5. The maximum net capital loss that you can carry back is listed. Enter the amount you want to carry back for each applicable year and continue.

You've now carried back your net capital loss. TurboTax includes your T1A Request for Loss Carryback with your return and the CRA will action your request in due course. Your carryback amounts won't affect this year's tax return.

To carry back a net capital loss on paper or in TurboTax Download Forms mode, complete Form T1A, Request for Loss Carryback and include it with your current year tax return. You don’t have to file an amended return for the year you want the loss applied to.