NON-CAPITAL LOSSES CARRY FORWARD/BACK
Generally, a non-capital loss for a particular year includes any loss incurred from employment, property or a business. If your allowable business investment loss (ABIL) realized in the particular year is more than your other sources of income for the year, include the difference as part of your non-capital loss.
Non-Capital Loss Carry Forward or Back Schedule
| YEAR LOSS INCURRED | CARRY FORWARD PERIOD | CARRY BACK PERIOD |
| TAX YEARS ENDING BEFORE MARCH 23, 2004 AND PRIOR | 7 YEARS | 3 YEARS |
| TAX YEARS ENDING AFTER MARCH 22, 2004 AND BEFORE JANUARY 1, 2006 | 10 YEARS | 3 YEARS |
| TAX YEARS ENDING AFTER DECEMBER 31, 2005 | 20 YEARS | 3 YEARS |
Click HERE for the CRA discussion on this subject.
You can carry a non-capital loss arising in 2003 or prior years back three years and forward seven years. You can carry a non-capital loss arising in taxation years ending after March 22, 2004, back 3 years and forward 10 years.
You can generally carry a non capital loss arising in taxation years ending after 2005, back three years and forward 20 years. However, this extension does not apply to a non-capital loss resulting from an ABIL. Instead, an ABIL that has not been used within ten tax years will continue to become a net capital loss in the eleventh year.
If you cannot deduct your ABIL arising in 2003 or prior years as a non-capital loss by the end of the seventh year, the unapplied part becomes a net capital loss. You can use this loss to reduce your taxable capital gains in the eighth year or any year after.
The unapplied part of your non-capital loss resulting from an ABIL arising in 2004 or future years will become a net capital loss in the eleventh year.
You can reduce your taxable income by deducting any unapplied non-capital losses you reported on your returns for the last 7 years or any unapplied farming or fishing losses for the last 10 years.
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