T936: Calculation of Cumulative Net Investment Loss (CNIL)

What’s in this article?

 

What is this?

Form T936 is used to calculate the cumulative net investment loss (CNIL), if you had investment income or investment expenses in the year. CNIL is the cumulative excess of your investment expenses over investment income and is used in the calculation of the capital gains deduction available on the sale of qualified capital property.

Canada Revenue Agency (CRA) says…

Your CNIL reduces the amount of your cumulative gains limit for the year and may affect the allowable amount of your capital gains deduction.

Note: Since the CNIL is a cumulative total, you should keep a record of your completed T936 for reference in a future year.

If you are a Québec resident, complete form TP-726.6-V: Cumulative Net Investment Loss if you had investment income or expenses in the year and want to calculate your CNIL.

 

Am I eligible?

If you had investment income or investment expenses in the year, you must complete form T936 to calculate your CNIL. Even if you are not claiming a capital gains deduction for the year, you must still complete this form if you had investment income or expenses.

Investment income includes:

  • All income from the capital property including rental income, interest income, and dividends;
  • Amounts from insurance proceeds for the recapture of capital cost allowance;
  • Home insulation or energy conversion grants;
  • Payments received as an inducement or reimbursement;
  • CPP or QPP death benefit payments reported on your T1 return;
  • Allowable capital losses included in partnership losses of other years after 1985;
  • Farming and fishing income reported by a non-active or a limited partner;
  • 50% of income from the recovery of exploration and development expenses;
  • Other income from a trust;
  • Income from the appropriation of property to a shareholder; and
  • Amounts withdrawn from AgriInvest Fund 2.

 

Investment expenses include:

  • Carrying charges and interest expenses;
  • Foreign non-business tax under subsections 20(11) and 20(12);
  • Losses arising from rental, limited or non-active partnership other than allowable capital losses, farming or fishing losses claimed by a non-active partner or a limited partner, and limited partnership losses of other years after 1985;
  • 50% of exploration and development expenses;
  • Repayments of inducements or refund interest;
  • The uncollectible portion of proceeds from dispositions of depreciable property (except passenger vehicles that cost more than $30,000);
  • Life insurance premiums deducted from property income;
  • Capital cost allowance claimed on certified films and videotapes; and
  • Sale of agreement for sale or mortgage included in proceeds of disposition in a previous year under subsection 20(5).

Do not include the following expenses on the form:

  • Expenses incurred to earn business income;
  • Repayment of shareholders' loans deducted under paragraph 20(1)(j); or
  • Interest paid on money borrowed to:
    • buy an income-averaging annuity contract;
    • pay a premium under a registered retirement savings plan; iii) make a contribution to a registered pension plan;and
    • make a contribution to a deferred profit-sharing plan.

 

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 OTHER icon. You will find yourself here:
  3. Under the MISCELLANEOUS section, select the checkbox labelled Calculation of cumulative net investment loss to December 31, 2015 (T936).
  4. Scroll to the bottom of the page and click Continue.

When you arrive at the appropriate page for form T936, enter your information into the tax software.

 

Where can I learn more?