How is a 2016 loss carried back to previous years?
You can carry your 2016 net capital loss back to 2013, 2014, and 2015 and use it to reduce your taxable capital gains in any of these years. When you carry back your net capital loss, you can choose the year(s) to which you apply the loss.
When you apply a net capital loss back to a previous year's taxable capital gain, it will reduce your taxable income for that previous year. However, your net income, which is used to calculate certain credits and benefits, will not change.
If you carry your 2016 net capital loss back to 2013, 2014, or 2015, you do not have to adjust the amount of the 2016 net capital loss since the inclusion rate is the same for these years.
To apply a 2016 net capital loss to 2013, 2014, or 2015, complete Section III - Net capital loss for carryback on Form T1A, Request for Loss Carryback. It will also help you determine the amount you have left to carry forward to future years. Do not file an amended income tax and benefit return for the year to which you want to apply the loss.
If you apply a 2016 net capital loss to a previous year, any capital gains deduction that you claimed in that year, or a following year, may be reduced.
Forms and publications
- Guide T4037, Capital Gains
- Form T1A, Request for Loss Carryback
- IT232, Losses - Their Deductibility in the Loss Year or in Other Years
- Line 254 - Capital gains deduction
- Line 253 - Net capital losses of other years
- Summary of loss application rules
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