Lines 21699 and 21700 – What happens when you incur an allowable business investment loss (ABIL)?

You can deduct your ABIL from your other sources of income for the year. If your ABIL is more than your other sources of income for the year, include the difference as part of your non-capital loss.

Although you can generally carry a non-capital loss back 3 years and forward 20 years, this does not apply to a non-capital loss resulting from an ABIL. Instead, an ABIL that has not been used within 10 tax years will become a net capital loss in the eleventh year.

To carry a non-capital loss back to 2019, 2020, or 2021, complete Form T1A, Request for Loss Carryback, and include it with your 2022 income tax and benefit return (or send one to the CRA separately). Do not file an amended return for the year to which you want to apply the loss.

The unapplied part of your non-capital loss resulting from an ABIL will become a net capital loss in the eleventh year. You can use this loss to reduce your taxable capital gains in any year after.

Forms and publications

• Guide T4037, Capital Gains
• Form T1A, Request for Loss Carryback
• Archived Interpretation Bulletin IT232R, Losses – Their deductibility in the Loss Year or in Other Years
• Income Tax Folio S4-F8-C1, Business Investment Losses

Related topics

• Line 25200 – Non-capital losses of other years
• Line 25300 – Net capital losses of other years
• Line 25400 – Capital gains deduction