Net capital loss and requesting a carry back | Income tax filing | Discussion forum

You are a bit late doing your 2021 taxes but whatever motivates you I suppose.
1. Look at each of the marginal tax rates at which you paid tax in 2018, 2019, 2020. That is readily apparent on Page 5 (Step 5) of your Federal T1. Pick the one with the highest marginal tax rate to maximize your tax savings, or if they are about the same, pick 2018 because that opportunity to do so will be lost after 2021.
Caveat: You have to have enough capital gains in the tax year you pick to offset that capital loss, i.e. you can only use capital losses against capital gains. Look at line 12700 (Schedule 3) to be sure.

2. Assuming you have enough capital gains in the tax year of choice to offset your $100 capital loss, what you will get back is 50% of your combined provincial+federal marginal tax rate. At best you will get about $25 back in taxes.

3. Yes. That would be the easiest thing to do. $100 of capital losses is a piddly amount to be doing a T1-ADJ form on for either 2018, 2019 or 2020.

The capital loss does not expire.

CRA does not do anything for you. It is up to you to file a tax return, either manually by paper, or by tax software and either mailed, or submitted electronically via Netfile.

CRA does an automatic re-assessment of a prior year tax return once you actually complete the T1-ADJ and file it.

If you read your NOA you'll see it (cumulative) noted there every year as available to offset against taxable capital gains.

It is not T1-ADJ to carry back capital losses to previous years. One isn't correcting an error in the previous returns.

It is Part 5 of a T1A (Request for Loss Carryback).

It is not automatic because taxpayer can choose how much of the capital loss to carry back and how much to apply to each of the previous three years.

I applied a capital loss years ago. For 2021 you could apply it to 2020, 2019 and 2018. In my case I split the losses to all three years using only what was necessary to reduce the capital gain to zero.

Off topic, but I also filed for the disability amount for my mom. You could have the disability credit applied to prior returns also as it depends on when the condition started to deteriorate. In my mom's case it was the two prior years.

TommyT: Communism? Seriously? You still get to keep all your productive property (investments) and that is definitely not communism, where all the means of production are state-controlled and -owned.

Mind you, some people call all taxation "communism." But then some people still call Beanie Babies a "good investment."
RetirEd

TommyT, it would help if you elaborated on which particular change in the tax law you're referring to - ?

Also Revenue Canada doesn't exist, it's been an agency, CRA, for some time now. And CRA's pockets don't actually get to keep the taxes, the Agency has the job of collecting taxes and depositing them into the nation's treasury where it's used for the roads you drive on, etc.