Capital Loss Carryover Calculator Canada

Understanding your capital loss carryover

When the capital losses you realize in a year exceed your capital gains, the excess does not disappear, but it cannot be deducted against salary or business income either. It becomes a net capital loss, which you can carry back against the taxable capital gains of the three preceding years or carry forward indefinitely until you have a gain to use it against. This calculator shows how much goes where and what it is worth in tax.

Enter this year’s realized gains and losses, the capital gains you reported in each of the three previous years, and your marginal tax rate. The tool reports the net capital loss, how much each prior year absorbs, the refund the carryback should produce, and the balance that carries forward.

How the netting works

The order matters.

First, this year’s losses are netted against this year’s gains. If gains are larger, you have a taxable capital gain and nothing to carry. If losses are larger, the excess is the amount available.

Second, that excess is multiplied by the capital gains inclusion rate, the step people most often skip. Prior-year gains were reported at the inclusion rate, so the loss has to be converted to the same basis. A $20,000 excess of losses becomes a $10,000 net capital loss at a 50% inclusion rate, and that $10,000 can be applied against $10,000 of prior-year taxable gains.

Third, the net capital loss is applied to the earlier years’ taxable gains (their gross gains times the inclusion rate) until either the loss or the available gains run out. Whatever is left carries forward.

With the default inputs, $26,000 of losses against $6,000 of gains leaves a $20,000 excess and a $10,000 net capital loss. The three prior years had $8,000, $5,000 and $3,000 of gains, so $4,000, $2,500 and $1,500 of taxable gains, $8,000 in all, can absorb it. That carries back $8,000, worth an estimated $3,440 refund at a 43% marginal rate, and leaves $2,000 to carry forward.

Why the calculator applies the oldest year first

You may direct a carryback to any of the three preceding years in any combination. This tool fills the oldest eligible year first because the three-year window moves with you: a loss next year can only reach back to what is then three years ago, so a year you skip today may be out of range tomorrow. Using the oldest year first keeps the recent years available for future losses.

The default is wrong in one situation. If your marginal rate was much higher in a recent year, such as a year with a large bonus, a business sale or a one-time gain, a dollar of loss recovers more tax there. The tool takes a single marginal rate, so run it twice with different rates, compare the refunds, and direct the carryback accordingly on Form T1A.

What the carryforward is worth

Net capital losses in Canada never expire, but an unused loss is a deferred asset, not money in hand. Its value depends on you eventually realizing capital gains to use it against, and on the rate you pay then.

The future tax value shown is the carryforward times your marginal rate; treat it as an upper bound. If the gains come many years later, inflation has eroded it. If you never realize offsetting gains, unused net capital losses can be applied on your final return against capital gains arising on death, and in the year of death (or the year before) they may also be applied against other income, subject to conditions.

Superficial losses and tax-loss selling

Realizing a loss on purpose to create a carryover is a legitimate and common strategy, usually done near year end. The rule that catches people is the superficial loss rule. If you sell a security at a loss and you, your spouse, or a corporation or trust affiliated with you acquires the identical property in the 30 days before or after the sale and still holds it at the end of that period, the loss is denied. It is added to the adjusted cost base of the property you now hold, but it is unavailable this year.

The window is 61 days in total and applies across accounts. Selling in a taxable account and buying the same security in your RRSP or TFSA is caught, and in that case the loss is denied permanently, because it cannot be added to a cost base inside a registered plan. Buying a similar but not identical security, such as a fund tracking a different index, is the usual way around it.

The calculator shows the superficial loss window with the results as a reminder, drawn from a maintained parameter.

All results are estimates based on the figures you enter, and the refund assumes the prior-year reassessments go as expected. This is general information, not tax advice. Capital loss rules interact with allowable business investment losses, the identical property rules and the treatment of losses on death, so have a qualified Canadian tax professional review anything material before you file.

About This Tool: Capital Loss Carryover

Capital loss carryover: use this tool to get an instant, accurate estimate. The figures follow official CRA guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.