Capital loss carry backward

[BOBO2022]

Hi,

I have a capital loss for the year 2021 and would like to offset the capital gain for the prior three years (year 2018-2020) and not sure how to do it.  I tried to enter into capital gain history but the tax calculation result is the same as without it, which seems not right.  I have read some previous comments from the forum about T1A, and I am wondering if I will have to complete the T1A form manually and mail it out, and file my tax online or I will have to submit both the T1A and the tax filing by mail.  Hope some one can help me with this. 
 

Thanks in advance for the help and advices

[TheTaxSmith]

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

[BOBO2022]

To Taxsmith,

Thank you very much for the very instruction.  Finally got it done!
 

[MisterVinh]

I have loss this year that can be carried back to offset the gains of the previous 3 years.

I filled of the amounts in the interview section but cannot find the form T1A. In the tax result I found there is T1A but with information of only 1 of the 3 years.

There is no change in tax owning or refund, with or without the declarations in the interview section.

 

MisterVinh

[Geo123]

Hello MisterVihn,

The CRA allows you to carry net capital losses back up to three years.  To carryback a capital loss, fill out section II on form T1A, Request for Loss Carryback. You do not have to file an amended return for the year to which you want the loss applied.

 

Applying net capital loss from previous years

 

You have capital gains in the current taxation year. However, you have sustained some capital losses in the previous years.

 

You can request both the federal and provincial governments to have these net capital losses carried over to be applied against the current year's capital gains.

 

To carry over these losses using the program, please follow these steps:

 

1-On the "Left side menu on the Interview tab", select "Interview setup".

 

2-On the page appearing on the right, go to the group "Carryforward amounts and prior year information", check the box "Losses of prior years, carrybacks". Click "Next" at the bottom of the page.

 

3- Return to the "Left side menu on the Interview tab" and select "Losses of prior years and carrybacks".

 

4-On the screen generated on your right, go to the "Losses of other years" group and choose the line "Net capital losses of other years".

 

5-On the page that appears, enter the losses from previous years in the appropriate fields. You should first enter your capital gains.

 

The amounts will be reported to line 25300 of the federal returns and line 290 of the Quebec return.

 

The program will generate for the federal form "Applying net capital losses of other years to 2020" and Quebec form TP-729.

 

For more information, please visit the following CRA link:

 

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-253-net-capital-losses-other-years.html

 

[DGB]

Hi. Thanks for the information above. I'm in a situation where I have an investment loss this year that I'm applying to a previous investment gain year. Will Ufile take care of the filing of the T1A automatically or do I have to print it and mail it separately?  Thanks.

 

[Geo123]

Hello DGB,

The form T1A Request for Loss Carryback is included in your tax netfiling.

[Thor66]

@Geo123in your post of the 16 Jan you initially describe how to apply a gain from within the last 3 years to offset a loss this year and hence reclaim some of that gain. But then you describe the steps for how to carry forward a loss, not how to carry forward a gain. I've tried the T1A form for a straight forward capital stock gain, but it has no effect on my total return. Could you explain the steps with a simple example such as $60K capital gain in 2021, $80K capital loss in 2022. What would you fill in where in he T1A to gain the tax charged on the 2021 $60K gain? - as I can't seem to get it to have any effect!

Many thanks.

[Geo123]

Hello Thor66,

Capital gains are not carried forward, only capital losses (if can not be used in current year).  For T1A loss carry back  you would use T1A f you incurred net capital losses in the current year

[Thor66]

@Geo123My question was not talking about carrying capital losses forward, but about carrying a capital loss backwards with the T1A form.  Please check out my questions again as it asks how to use the T1A for such a scenario.  Also does the T1A effect the 2022 NOA, or is the T1A separately assessed? Thanks.

[Curmudgeon]

In the T1A go down to Net capital loss for carryback. Put $60,000 in the 2021 box. If there were capital gains in 2020 and/or 2019, the remaining $20,000 can be applied there. If there are no previous capital gains or less than $20,000, the $20,000 (or what is left) is carried forward to be used in the future. The T1A is automatically part of the submitted Ufile return.

The 2022 NOA will show the amount of capital loss carried forward. After assessment, the CRA will send you the tax refund from 2021.

[Thor66]

Great, thanks. Your last sentence is valuable, i.e. any refund is not part of the 2022 tax calculation, but an independent assessment of the T1A and refund by the CRA.  Many thanks.

[r.huang3]

.

[Greentea]

Hi, in T1A to carry back the capital loss in current year (to offset the capital gain in prior years), do we enter the full amount of the loss or just 50%? Thanks!

[polar12]

On 3/13/2023 at 11:39 PM, Thor66 said:

Great, thanks. Your last sentence is valuable, i.e. any refund is not part of the 2022 tax calculation, but an independent assessment of the T1A and refund by the CRA.  Many thanks.

@Thor66 did you print out the form T1A separately and mail to CRA for prior year reassessment? or ufile will automatically do so after you fill out the T1A form within the program? Many thanks,

[AYU]

I have capital loss from prior years.  I have capital gain in 2022.  How do I carry forward the capital loss from past to offset the 2022 capital gain.  The program seems to imply it is automatic, but the calculation upon review doesn't show any application of prior years capital loss.  Any advice is appreciated.

[Geo123]

Hello AYU,

Line 25300 - Net capital losses of other years / Line 12700 - Capital gains.

Generally, if you had an allowable capital loss in a year, you have to apply it against your taxable capital gain for that year. If you still have a loss, it becomes part of the computation of your net capital loss for the year. You can use a net capital loss to reduce your taxable capital gains in any of the 3 preceding years or in any future year.

You can apply your net capital losses of other years to your taxable capital gains in 2022. Your available losses are shown on your notice of assessment or reassessment for 2021. Your notice will show your prior-year losses and your current year loss after adjustment. You only have to add those 2 amounts to calculate your total net capital loss available for 2022.
 

[JK12]

@AYU @Geo123  @Maggie3  I am in a similar situation where I have a taxable capital gain of $5314.92 and per my Notice of Assessment I have $23,132 of unused net capital losses. I have followed the instructions posted repeatedly here about going to : Interview > losses of prior years/carrybacks > capital loss carryforward. Now, in 2021 I see auto fill has already got the $23,120 amount for 2021. So, I scroll to the bottom where the last box says 'limit to the deductible capital losses applied this year'. No matter what # I put here like $5314.92 (my taxable capital gain) or the full 23,132 - it makes no difference. I enter a # and go to next, then click tax return and there is no change anywhere. almost like Ufile is not detecting that I want to apply my losses. Am I missing something? Any advice would be appreciated. 

[Maggie3]

Hello JK12,

The amount remains the same on line 12700. You should look at line 25300. That is where the deduction shows up.

[Pleasehelp]

Hi I filed my 2022 tax return on ufile but did not include the prior years loss carry back against the cap gain in 2022. How should I deal with this? Do I wait till next year to file my 2023 and then add in the T1A form?

[Geo123]

Hello Pleasehelp,

You can ReFile 2022 and claim the T1A or wait until 2023.

UFile allows to ReFILE  your 2021 (and 2022 tax return) . 
Note for the prior tax years you should make the adjustment: T1-ADJ
1)    If you tax return was successfully submitted, please go to « NetFile  » tab [5]. 
Click on "Federal submission" section. On the bottom of the page, click "Re-FILE".
NOTE: A new page "CRA ReFile" will appear in the left menu of the "Interview" tab.
2)    Select the section from the Left-side menu, then click "Federal ReFILE Mode".
Follow the instructions on the page.
NOTE: A new page "CRA ReFile" will appear in the left menu of the "Interview" tab.
Select the section from the Left-side menu, then click "Federal ReFILE Mode".
3)    Make the appropriate changes to your file.(same as in “normal” UFile)
**VERY IMPORTANT! ** You cannot update your marital status, address, direct deposit or email address by using the service ReFILE.  If you have split-pension you must mail it in using a T1 - ADJ.  
4)    Click "Review" tab, then click "NETFILE" tab.
Tick the box "I agree with the ReFILE Terms and Conditions and Private Notice".
Click "ReFILE my return now!".
(is displayed at bottom right of NetFile screen "Select CRA REfile)
-For Revenu Quebec same process applies but for Revenu Quebec ReFile
Note that cannot refile with Quebec until you have received your assessment