How do you use a capital loss?
You have a capital loss when you sell, or are considered to have sold, a capital property for less than its adjusted cost base plus the outlays and expenses involved in selling the property.
For information on calculating your capital gain or loss, see How do you calculate your capital gain or loss?
Generally, if you had an allowable capital loss in a year, you have to apply it against your taxable capital gain for that year. If you still have a loss, it becomes part of the computation of your net capital loss for the year. You can use a net capital loss to reduce your taxable capital gain in any of the three preceding years or in any future year.
Unused 2016 net capital losses can be carried back to 2013, 2014, and 2015 without adjustment, but if unused net capital losses of other years are carried forward and applied to your 2016 taxable capital gains, you have to determine your adjustment factor, because the inclusion rate may have changed.
Our Summary of loss application rules chart indicates the rules and annual deduction limit for each type of capital loss.
Forms and publications
- Guide T4037, Capital Gains
- Schedule 3, Capital Gains (or Losses)
- Form T1A, Request for a Loss Carryback
- IT232 - Losses - Their Deductibility in the Loss Year or in Other Years
- Lines 217 and 228 - Business investment loss
- Line 253 - Net capital losses of other years
- Line 254 - Capital gains deduction
- Net capital losses for a deceased person
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