Capital gains carryback/carryforward question

[YLWGuy]

I need help with carryback/carryforward of capital losses with Ufile for Windows.

From my 2019 assessment I have $250 of net capital losses available.

In 2019, I reported $5000 of net capital gains.   I forgot to use the $250 of net capital losses when reporting my 2019 income tax

In 2020, I sold some shares and recorded a net capital loss of $6000.  I would like to carry back a net capital loss of $5000 to my 2019 income tax.

By my calculations I should be able to carry back $5000 of net capital losses to 2019.  The remainder ($1000 + $250) should carryforward to 2021.  How do I go about doing this on Ufile for Windows 2020.  Where do I enter the $250 in Ufile for Windows?

I would appreciate any help that can be offered. 

[TheTaxSmith]

Hi YLWGuy,

In the Interview section scroll down to the bottom and look for the carryforward section and tick off Losses of Prior Years. That will provide you with the data entry section.

Then scroll down in the list of form (Index) look in the new section added under Losses or prior years, carrybacks. You will need to add form T1A - Request for Loss Carryback.

If you had no capital gains in the last three years other than 2019 then all is straightforward. But if you had gains in either 2017 or 2018 you might want to consider comparing the benefit of taking the 2020 losses back further.

[YLWGuy]

Thank you for the update.  I have found the T1A - Request for Loss Carryback form and filled it in.  Do I need to send in a T1-ADJ adjustment request form as well?  How will the "surplus" net capital loss of $1250 be carried forward?  Is there another form for forwarding this net capital loss to 2021?

[TheTaxSmith]

Hi YLWGuy. For the carry back you don't file a T1-ADJ. The T1A schedule will be transmitted with your return and that is usually all you need to do. But as a suggestion consider printing it out and mailing it in. I have noticed over the years that at times the eflied T1A gets ignored. Usually however CRA is very quick at reassessing the prior year for the loss carryback.

For the carryforward there is nothing else to do. The software will bring that into the 2021 file automatically. That said you need to review your return and the CRA Notice of Assessment to make sure they have the carry forward stated correctly. You can check online for the carryforward as well prior to completing your 2021 return just to make sure all is OK. In fact is always prudent to check your online file prior to starting the subsequent year to make sure you can reconcile to things like loss carry forwards, RRSP balances, CNIL, etc..

[Joj]

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