Summary of loss application rules

This table is a summary of the various types of capital losses, the time limits relating to their application, and to what kind of income they can be applied.

Type of loss	Application rules	Limit to annual deduction
Allowable business investment loss	Any unapplied portion of an ABIL becomes a non-capital loss that can be carried back 3 years and forward 10 years. The unapplied portion of the non-capital loss will become a net capital loss that can be used to reduce taxable capital gains in the eleventh year or any year after.Footnote 1	No limit Limited to taxable capital gains in the year.
Net capital loss	Carry back 3 years Carry forward indefinitely	Limited to taxable capital gains in the year.Footnote 2
Farm lossFootnote 3	Carry back 3 years For a loss incurred after 2005, carry forward 20 years. For a loss incurred before 2006, carry forward 10 years.	No limit
Listed personal property (LPP) loss	Carry back 3 years Carry forward 7 years	Limited to net gains from LPP in the year.
Personal-use property loss	No loss allowed.Footnote 4	Not applicable
Restricted farm loss	Carry back 3 years For a loss incurred after 2005, carry forward 20 years. For a loss incurred before 2006, carry forward 10 years. You can use part of any unapplied loss to reduce your capital gains from the sale of the farmland that was used in a farming business.	Limited to net farming income in the year. Cannot be more than the property taxes and the interest on money you borrowed to buy the farmland that you included in the calculation of the restricted farm losses for each year. You cannot use it to create or increase a capital loss.
Superficial loss	No loss allowed You can usually add the amount of the loss to the adjusted cost base of the substituted property.	Not applicable