T1A - UFile Windows - Carryback net capital loss

[WellDone]

I recorded my net capital loss for 2022 and also completed Part 5 of T1A (Net capital loss for carryback) and attributed my 2022 loss to 2021 capital gains (where I did pay some tax).  However I am not seeing any change in my 2022 tax due?  Am I missing anything? can anyone provide some insight as to how this T1A works?

Thanks

[Geo123]

Hello WellDone,

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

 

[WellDone]

Hello Geo123,

I have done that, however I am not seeing any change in my amount due. The amount due is same with or without T1A. Is that right? I was expecting the amount due to be reduced when I complete the T1A.

[Geo123]

Hello WellDone,

Please contact UFile Support so we may review the file confidentially - namely the T1A.
For telephone support, please call: 514-733-8414 or 1-888-633-8414
An agent can review the issue with you.
If you prefer, you can also open a request ticket and submit an anonymous file for review on-line at https://www.ufile.ca/contact/contact-us

[BLSM]

WellDone, I don't think there would be any change.  You aren't affecting your 2022 tax due.  Once the T1A is processed, CRA will re-assess 2021 and send you a new NOA and refund, I believe.

[WellDone]

Thank you all!

[Thor66]

@BLSM So what you're saying is that completing the T1A will not mean that Ufile will calculate what will be refunded, the tax to be paid or refunded remains the same, but at some point later the CRA will adjust the prior years NOAs and send me the refunded amount of tax I paid in prior years?  This isn't very clear as I was expecting Ufile to calculate what the CRA will be paying me back.  I just want to confirm my understanding from what you stated, as otherwise I'm seeing no effect from completing the T1A.

Thanks.

[LOU23]

Hi Thor, same issue/question as you. My guess, same as BLSM. 

Applying a loss from 22 vs gain in 20. Thought the program would show me how much I would be getting back but there's no difference with or without the T1A filled out. 

**Any clue if we should be entering the full capital loss in the T1A or just 50%?

[BLSM]

As far as I know, UFile is only calculating this year's tax.  

The T1A belongs to a different year, and when you send it in, it will be dealt with separately, at least in my experience.

Brenda

 

[Geo123]

Hello LOU23,

The T1A does not affect the current year's tax return. The CRA and Revenu Québec will reassess the corresponding year's tax returns based on the information in the T1A or TP-1012. They will issue you a report later.

Regarding full capital loss in the T1A or just 50%?  : For Stock / Share loss must include the inclusion rate of 50%

[D B]

Adding to above discussion, when filling the amount to be applied to previous years, should we fill the full capital gain amount or just the taxable amount (i.e. 50% of the capital gain amount)?

[Geo123]

Hello D B,

50%.  

 In the page that appears entitled "T1A - Request for current year loss carryback" choose the section that corresponds to your situation and select the year or years for which you want to apply your losses, starting with the loss from the earliest year to carry-back years.
NOTE : For Stock / Share loss must include the inclusion rate of 50%
 

[MRB]

You need to file the number from line 19900, which includes the 50% and not the line 19700, which does not include this factor. Also, you need to do it separately for you and your spouse if it happens to be something held jointly and that you want also to claim jointly as a carryback. Note, there are years that it is not 50%, but if it is recent, it will be that number.

[Sammy72]

 

Deleted

[Paul349]

Does the T1A go automatically with net file or does it need to be mailed?

[WellDone]

There is no need to mail T1A separately.

[Terpie]

I cannot get ufile to correctly process a capital loss in 2022 against a capital gain I earned in 2021

The loss in 2022 was around 10k and the gain in 2021 was around 16k

The tax software accepts my inputs in the Net capital loss to be applied in 2021 but the total tax payable value does not decrease.  So I am under the impression that it is not correctly processing my capital loss against a previous capital gain.

 

I get the feeling I am missing a critical data input field but its not intuitive and I do not see an specific step by step instruction for applying a 2022 capital loss against a previous years capital gain.

 

Thanks

 

 

[Geo123]

Hello Terpie,

If you incurred net capital losses in the current year, you can carry back these losses and apply them to the capital gains of the past THREE years.

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

2. On the right-hand side of the screen, go to the "Investment income and expenses" group, check the Box "Capital gains (or losses) and capital gain history", then go to the "Carryforward amounts and prior year information" group, check the Box for "Losses of prior years, carrybacks" and click on "Next" at the bottom of the screen.

3. Return to the "Left-side menu on the Interview tab" and select "Capital Gains (or losses) & ABIL" on the right-hand page, choose the option that suits you and enter your capital gains or capital losses.
4. Return once again to the "Left-side menu on the Interview tab" and select "Losses of prior years and carrybacks".

5. On the screen to the right, scroll down to "Loss carryback" group, and click on the plus "+" icon to the right of the line "T1A - Request for loss carryback (loss which occurred in 2022)".

5.    In the page that appears entitled "T1A - Request for current year loss carryback" choose the section that corresponds to your situation and select the year or years for which you want to apply your losses, starting with the loss from the earliest year to carry-back years.
6.    NOTE : For Stock / Share loss must include the inclusion rate of 50%

The program will generate Federal form T1A as well as Quebec form TP- 1012.A.

Quebec residents will have to print form TP- 1012.A, sign it and mail SEPARATELY from other documents, because it cannot be netfiled, whereas the Federal T1A can be sent via NETFILE.

The T1A does not affect the current year's tax return. The CRA and Revenu Québec will reassess the corresponding year's tax returns based on the information in the T1A or TP-1012. They will issue you a report later.

For more information on this topic, please see the following links

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-127-capital-gains/capital-losses-deductions.html
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

To carry back different types of losses, click  at the right.ie all types of losses

 EXAMPLE :
>>Have current year losses that can be applied (carried back) 
eg. Fishing Business Loss -10,000
 
Eg. NOTE : For Stock / Share loss must include the inclusion rate of 50%

Shares loss -10,000 / 2 (due to 50% inclusion rate) = 5,000

 >>T1A Fishing Loss $10,000 CB
 
>>Shares loss $5,000 CB