TP-729-V - Carry-Forward of Net Capital Losses

This form must be completed by any individual (including a trust) who wishes to carry forward to a given taxation year (called the “carry-forward year”)

• a net capital loss sustained in a previous year;
• the unused portion of a business investment loss, provided that portion has become a net capital loss and is being carried over as such for the first time.

As a rule, a net capital loss can only be used to reduce the net taxable capital gain for the carry-forward year. However, you may use losses sustained before May 23, 1985, to reduce income from other sources, to a maximum of $1,000. To do so, complete Work chart 2 on page 2.

For more information concerning the carry-over of a net capital loss or a business investment loss, refer to the guide entitled Capital Gains and Losses (IN-120-V).

This form must be enclosed with the income tax return for the carry-forward year.

Notes In this form, any balance that may be carried forward is determined using the inclusion rate of 1/2, that is, the rate applicable to the carry-forward year. Therefore, net capital losses sustained in the period from 1988 to 2000, when the rate was not 1/2, must be converted to the rate of 1/2. Since losses must be carried forward in the order in which they were sustained, you must carry forward the least recent loss first. Losses should be entered on this form without the minus sign (-).

See Also

Income Tax Return Guide – Line 290