Non-capital losses (allowable) from this or previous years

What’s in this article?

 

What is this?

A non-capital loss can include any loss incurred from employment, property or a business, and unused allowable business investment loss (ABIL) realized in a particular year. If ABIL in a year is more than your income for the year from other sources, include the difference as a part of your non-capital loss. Click this link for more information on business investment loss.

Non-capital losses can be applied against any other sources of income for the year, after being applied to the other sources of income any non-capital loss left can be carried back 3 years or be applied against other income or carried forward.

 

Am I eligible?

If you have a non-capital loss that is realized in the year, you must report it on your income tax return. Unapplied non-capital loss can be used to reduce taxable income.

 

Canada Revenue Agency (CRA) says ……

You could have carried a non-capital loss arising in a tax year ending prior to March 23, 2004, back three years and forward seven years. You can carry a non-capital loss arising in a tax year ending after March 22, 2004 through December 31, 2005, back 3 years and forward 10 years.

You can generally carry a non-capital loss arising in tax years ending after 2005, back 3 years and forward 20 years. However, this extension does not apply to a non-capital loss resulting from an ABIL. Instead, a non-capital loss resulting from an ABIL arising in tax years ending after March 22, 2004, that has not been used within 10 tax years will continue to become a net capital loss in the eleventh year. Furthermore, a non-capital loss resulting from an ABIL arising in tax years ending prior to March 23, 2004, that was not used within seven tax years became a net capital loss in the eighth year.

Your available losses are usually shown on your notice of assessment or notice of reassessment for the previous years.

 

Revenu Québec says …..

You can deduct the following losses, provided you did not deduct them in a previous year:

  • non-capital losses 
  • farm losses and restricted farm losses
  • limited partnership losses

The amount of non-capital losses can be calculated for the year they were sustained using form TP-1012.QA-V, Carry-Back of a loss.

There may be a limit on your deductions for restricted farm and/or fishing losses and limited partnership losses. Click this link for more information on restrictions on deduction amounts.

 

Where do I claim this?

Follow these steps in H&R Block’s tax software to file your 2015 taxes:

  1. Click the PREPARE tab.
  2. Click the YOUR YEAR IN REVIEW icon. You will find yourself here:
  3. Click the checkbox labelled I had investments.
  4. Scroll to the bottom of the page and click Continue.
  5. Click the RRSPS AND INVESTMENTS icon.  You will find yourself here:
  6. Under the INVESTMENT INCOME heading, click the checkbox labelled Non-capital losses.
  7. Scroll to the bottom of the page and click Continue.

When you arrive at the appropriate Non-capital losses page, enter your information into the tax software.

 

Where can I learn more?