Tax Question: CNIL

[wrx2k3]

This deals with capital gains. I know capital gains are taxable at 50%. How about CNIL (cumulative net investment loss). Can you carryover the entire 100% loss to future years? Or are you subject to a maximum 50% carryover rate?

For example. You lost $1,000 in 2004. Will you be able to carryover the full $1,000 (100%) or $500 (50%) to 2005?

TIA.

[DragonZealot]

If you have capital lost $1000 in '04 it will show up in your '04 notice of assessment that you have unused net capital losses from other years of $500 (assume you have no capital losses from other years).

You can apply this $500 net loss against your NET capital gain of '05 and subsequent years.

[wrx2k3]

If you have capital lost $1000 in '04 it will show up in your '04 notice of assessment that you have unused net capital losses from other years of $500 (assume you have no capital losses from other years).

You can apply this $500 net loss against your NET capital gain of '05 and subsequent years.

Thanks for your answer.

If you have previously made a mistake or never filed/reported a CNIL, can you still claim it on your current/next return?

[eelfliw]

I'm confused.

Are you saying Capital Loss is the same as Cumulative Net Invetment Loss? I thought these are different in that CNIL is income loss, not capital loss.

[DragonZealot]

Thanks for your answer.

If you have previously made a mistake or never filed/reported a CNIL, can you still claim it on your current/next return?

You have the file an adjustment (T1-ADJ) to your previously year then after the request is granted you can then apply the loss.

More info here (http://www.cra-arc.gc.ca/tax/individuals/topics/income-tax/changereturn-e.html) .

[wrx2k3]

I'm confused.

Are you saying Capital Loss is the same as Cumulative Net Invetment Loss? I thought these are different in that CNIL is income loss, not capital loss.

Well, the CNIL form from CRA says:

- Use this form if you had any investment income or investment expenses
- Your CNIL reduces the amount of your cumulative gains limit for the year and may affect the allowable amount of your capital gains deduction.

I believe it applies to both investment and capital loss. For more information, check out the CNIL form from CRA:

CNIL for 2005 (http://www.cra-arc.gc.ca/E/pbg/tf/t936/t936-05e.pdf)

[wrx2k3]

You have the file an adjustment (T1-ADJ) to your previously year then after the request is granted you can then apply the loss.

More info here (http://www.cra-arc.gc.ca/tax/individuals/topics/income-tax/changereturn-e.html) .

Thank you! :) :)

Have you gone through this process before?