Keeping track of your capital gains and losses history is important because in many cases, the losses you experienced in one year can be used to offset the capital gains you realized in another. Completing this section will allow H&R Block’s tax software to apply your oldest losses first.
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Tax year loss was incurred – Your notice of assessment (NOA) provides a year by year breakdown of any capital gains/losses you’ve incurred. Enter the capital gains or losses from each year as it appears on your most recent NOA.
Inclusion rate – The inclusion rate is used to determine the allowable capital loss that you’re allowed to claim on your return. To determine the allowable amount, simply multiply your capital loss by the applicable inclusion rate. Since the inclusion rate for 2016 is 50%, you’d have to multiply your capital gains loss for the year by 50%. Thankfully, H&R Block’s tax software will perform this calculation for you, based on the information you enter.
Note: You can find the applicable inclusion rate on your most recent NOA.
Taxable capital gain amount – Enter the capital gain amount you realized in a previous year; this amount can be found on your most recent NOA.
Unapplied net loss amount – Enter the amount of losses incurred in a previous year that is being carried forward for this and future tax years. This amount can be found on your most recent NOA.
Net loss applied from a prior year – This amount represents a loss that has been carried forward from a previous year that can be applied against a capital gain you’ve earned this year. You can find this amount by signing into your CRA My Account (registration required) or, if you’re a user of our Assistance or Protection packages, when you download your tax information from the government using the Auto-fill my return feature.
Net loss applied from a subsequent year – This amount represents a loss that you incurred in the years following a capital gain that you wish to apply to a previous return. You can find this amount by signing into your CRA My Account (registration required) or, if you’re a user of our Assistance or Protection packages, when you download your tax information from the government using the Auto-fill my return feature.
George realized and reported a capital gain of $5,000 on his 2014 tax return. In 2016, he incurred a loss of $3,000. George can enter his loss of $3,000 that he incurred this year in order to apply it against his previous capital gain.
Note: Adjustments to a prior year’s return is not supported in H&R Block’s tax software. For information on how to request an adjustment, check out our article, How do I change a return that’s already been assessed?