Take Advantage of Your Capital Losses

by Tax Guy - Burlington Accountant on November 26, 2010 Print This Post Print This Post

Did you report capital losses in previous tax years? If so, you may be able to use those losses in the current or prior three income tax years (if you have not been able to claim these losses in the past).

How Capital Loss Carryover Works

When you sell an investment or property during a tax year for less than you paid for it, you may have a capital loss. Any losses must be first applied to capital gains in the tax year and any excess losses cab be carried back three years or forward indefinitely.

Take Advantage of Past Capital Losses

As the tax year draws to a close, take this opportunity to review your Notice of Assessment or Notice of Reassessment sent to you from the CRA. On the from page, the CRA will tell you if you have claimed capital losses in prior years and are carrying them forward.

If you have stocks or mutual funds that are currently trading at a gain, you might want to take this time to sell your investments and offset the capital gains you your capital losses. If you have had capital gains in the prior three years and would like to use your net capital losses, you can file an amendment to your prior years tax return or claim it on all on your current tax return.

About The Tax Guy...

Dean Paley CGA CFP is a Burlington accountant and financial planner who services individuals and business owners locally, nationally and internationally. Dean has appeared in the National Post, Toronto Star and Metro News.

To find out more, visit Dean's website Dean Paley CGA CFP or connect via Twitter @DeanPaleyCGACFP.

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