Continuity of Non-Capital Losses Carryforwards

Non-capital losses carried forward from previous years are divided into several categories: restricted farming losses, farming or fishing losses, listed personal property losses and other non-capital losses.

For each category, a workchart shows the losses incurred in previous years. Opening balances are updated through the roll forward process, but you can also enter any relevant amount. If the opening balance is not the same for Québec income tax purposes (TP1), use the Shift+F9 command. Carefully review the allocation of losses carried forward by taxation year and adjust them where necessary (for instance, in case of a new assessment).

The program takes into account the opening balances as well as the taxpayer's income and tax credits in order to calculate and optimize the amount of losses carried forward to be claimed in the year. That amount is reported on line 252 of the T1 jacket (252a for restricted farming losses, 252b for farming or fishing losses or 252c for other non-capital losses).

Carried forward losses on listed personal property, however, update Schedule 3 and can only be claimed against gains realized upon the disposition of other listed personal property.

Losses from previous years which are not claimed in the current year are included in the end-of-year balance and, as such, are carried forward to the next year through the roll forward process.

You must enter the current year claim for limited partnership losses carried forward on line 251 of the T1 jacket. To do so, however, the opening balance must be entered on the appropriate line of the non-capital losses carryforwards workchart unless it has been reported through the roll forward process. Note that the carried forward loss from a limited partnership can only be claimed against income earned from that same limited partnership.