How can capital losses be deducted?
Capital losses can only be used to decrease or offset the capital gains realized in the three preceding taxation years. They can also be carried forward indefinitely to reduce any future capital gains. To report a capital loss in a previous year, the unitholder must submit a T1A Form – “Request for loss carry-back” to Revenue Canada (TP-1.R, in Québec). Local taxation offices have copies of the necessary forms.
