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Non-Capital Loss

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Glossary  -> 
Personal Income Tax ->
Small Business -> Non-Capital Loss

Non-Capital Loss

Income Tax Act s. 111(1), s. 111(8)

A non-capital loss includes unused losses from office, employment, business or property, and unused allowable business investment losses (ABIL).  

Non-capital losses can be carried back 3 years, or carried forward 7, 10 or 20 years.

The carry-forward periods are:

bullet for taxation years ending March 22, 2004 or earlier, 7 years.
bullet for taxation years ending after March 22, 2004, 10 years.
bullet for taxation years ending after 2005, 20 years (except ABIL).

Note that the extension of the carry-forward period to 20 years does not apply to unused allowable business investment losses (ABIL), which can only be carried forward 10 years.

Non-capital losses unused after the carry-forward period expire, and are simply lost.  Any unused ABIL after the carry-forward period becomes a net capital loss, which can be carried forward indefinitely to be offset against capital gains.

Tax Tips -   If you have non-capital losses that are going to expire:  
     Businesses:  You could reduce or eliminate your capital cost allowance (CCA) claimed in the current year or prior years.
     Individuals:  If you have RRSPs or RRIFs, a withdrawal can create income to offset the non-capital loss.

For further information see the CRA web page Non-capital losses of other years.

See also capital gain or loss, which includes net capital losses.

Revised: February 08, 2017

 

 

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