Chapter 8 Capital Gains (losses) continued - 2011

Chapter 8 Capital Gains (losses) continued - 2011 - Capital...

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Capital Losses Where they fit in the Act ©Jakubowicz - 2011 1 Employment Business Property Other s.3(a) Income from all sources s.3(b) +Taxable capital gains (net of allowable capital losses) s.3(c) - subdivision e deductions s.3(d) -Loss from employ, business, property, ABIL Division B net income Division C deductions includes capital losses of other years (“net capital losses”) Taxable Income
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©Jakubowicz - 2011 2 Capital Losses General Rules Deductible only against capital gains in the year Exception Allowable business investment loss (ABIL) Unused capital losses (“net capital loss”) Carry back up to 3 years Carry forward indefinitely Deduction limited to capital gains of those other years Deducted to determine taxable income - Division C
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©Jakubowicz - 2011 3 Capital Losses Restrictions Capital losses denied (nil) when related to: Depreciable property [p.39(1)(b)(i)] - covered Superficial losses [p.40(2)(g)(i)] slide 4 Personal use property [p.40(2)(g)(iii)] slide 5 Exception Listed Personal use Property Property transferred to RRSP [p.40(2)(g)(iv)]
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©Jakubowicz - 2011 4 Capital Losses Superficial loss [s.54] Conditions: 1. Asset disposed at a loss 2. Taxpayer or affiliated* person acquires same or identical property within 30 days 3. Taxpayer or affiliated* person owns the property at the end of the 60 day period. Loss denied (nil)
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Chapter 8 Capital Gains (losses) continued - 2011 - Capital...

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