Net capital losses

Here, we discuss how to apply a net capital loss that occurred in the year of death. We also explain how to apply net capital losses from earlier years to the final return and the return for the year before the year of death.

What is a net capital loss?
Generally, when allowable capital losses are more than taxable capital gains, the difference is a net capital loss. An allowable capital loss is 1/2 of a capital loss. Generally, a taxable capital gain is 1/2 of a capital gain. The rate used to determine the taxable part of a capital gain and the allowable part of a capital loss is called an inclusion rate.

Forms and publications

• Preparing Returns for Deceased Persons guide (T4011)
• Capital gains guide (T4037)