Capital losses and deductions

The topics below provide information on capital losses, and on different treatments of capital gains that may reduce your taxable income. Consult our Summary of loss application rules chart for the rules and annual deduction limit for each type of capital loss.

Topics

• How do you use a capital loss?
  A summary of how capital losses are applied to current, previous and future years.
• Capital gains deduction
  When capital gains arise from the disposition of certain properties.
• How do you apply your net capital losses of other years to 2023?
  Which losses are carried forward first? How does the inclusion rate affect the loss carry forward, and the amount entered on line 25300?
• How do you apply your 2023 net capital loss to previous years?
  How many years can a loss be carried back? Does the amount of the loss have to be adjusted? How do I complete Form T1A?
• Personal-use property losses
  When losses arise from the disposition of personal-use property like cars, boats and cottages.
• Superficial loss
  When you dispose of property for a loss, and you or a person affiliated with you, acquires it within 30 days before or after the sale.
• Allowable business investment loss (ABIL)
  What is a business investment loss? How is an ABIL determined, deducted, carried back or forward?
• Capital gains deferral for investment in small business
  When you dispose of a business investment and re-invest the proceeds in an eligible small business corporation.
• Restricted farm loss
  A farm loss will be only partly deductible if farming was not your chief source of income.
• Claiming a capital gains reserve
  When payment for a capital property is received over a number of years.

Forms and publications

• Guide T4037, Capital Gains
• Form T1A, Request for Loss Carryback
• Form T657, Calculation of Capital Gains Deduction
• Form T936, Calculation of Cumulative Net Investment Loss (CNIL)
• Archived Interpretation Bulletin IT232R3 - Losses - Their Deductibility in the Loss Year or in Other Years
• Income Tax Folio S4-F8-C1, Business Investment Losses

Related Topics

• Line 21699 and 21700 – Business investment loss
• Line 25200 – Non-capital losses of other years
• Line 25300 – Net capital losses of other years
• Line 25400 – Capital gains deduction