There are four types of capital losses:
Losses from listed personal property (such as artwork, jewelry, stamps, and coins) are only deductible from similar gains. Losses from the sale of personal use properties (such as a car or a boat) are not deductible. Losses from the sale of certain CCPC shares or debt may be considered “Allowable Business Investment Losses” (ABIL) which are deductible against other sources of income (albeit at a 50 per cent inclusion rate). The ability to claim an ABIL may be limited by previous years' capital gains exemption claims. Losses on the sale of other capital properties must first be netted against capital gains in the year, but may then be carried back three years (use Form T1-A) or forward indefinitely to offset capital gains.
Information for Tax Tips is provided as a public service by the Chartered Accountants of British Columbia.