Unused net capital losses

When you have an allowable capital loss, you need to apply it against your taxable capital gains from the same year. If your loss is greater than your gains, the difference is a net capital loss.

Note: You might have to report a capital loss if you sell a property for less than what you paid for it, and if you had any expenses involved with the sale. For a list of properties that can trigger a capital loss, check out Schedule 3.

You can apply your net capital loss against a taxable capital gain from another year to reduce it – either carry it back to any of the past 3 years, or carry it forward to use in a future year.

To carryback a loss (apply it to a previous year), complete form T1A: Request for loss carryback. Keep in mind that the inclusion rate changes depending on the year your loss is from, and that rate determines how much you can claim from a past year.

If you carried forward a net capital loss, you can claim it in a future year. Keep in mind, the unused net capital loss you claim in a year, can’t be more than your total taxable capital gains for that year.

Note: You have a capital gain when you sell (or are considered to have sold) a capital property for more than the total of its adjusted cost base (ACB) and the outlays and expenses you paid to sell the property. Your taxable capital gain is the portion of the capital gain that you need to report on your tax return.

You can find your available net capital losses on your most recent notice of assessment (NOA).

If you’re a resident of Québec, you can claim a deduction for net capital losses from before 2024 on form TP-729-V, provided they weren’t from the sale of personal-use or precious property and weren’t already deducted in a previous year. This includes carrying forward net capital losses from a previous year, or the unused portion of a business investment loss, if that portion became a net capital loss and is being carried over for the first time. Since losses must be carried forward in the order they occurred, the oldest loss needs to be carried over first.

As a rule, a net capital loss can only reduce the capital gains for the carry-forward year. However, you may use losses from before May 23, 1985 to reduce income from other sources, but only up to $1,000.

Keep in mind that if you’re requesting an adjustment to your investment expenses for the year, the information you enter on the net capital losses page of H&R Block’s tax software will impact your Schedule N.

Follow these steps in H&R Block's 2024 tax software:

  1. On the left navigation menu, click the Government slips tab, then Smart Search.

  1. Enter Capital gains and losses history in the search field then click the highlighted selection or press Enter to continue.

  2. When you arrive at the Capital gains and losses history page, enter your information into the tax software and click Continue.

To choose the amount of unused net capital losses you want to claim in 2024:

  1. On the left navigation menu, under Wrap-Up, click Final Review.

  2. On the Your income page, scroll down to the Unused net capital losses section.

  3. If you don’t want to claim the maximum allowable amount of your unused net capital losses, select No to the question about deducting the maximum allowable amount.

  4. Enter the amount of your unused net capital losses you want to claim.