Reporting a loss (Canada) - Carry over?

Discussion in 'Taxes and Accounting' started by ashkelon, Nov 14, 2019.

  1. ashkelon


    Started trading about two years ago. Made all the rookie mistakes, and lost $10K+. I didn't declare in taxes, assuming that a negative income is of no interest to CRA. However, the turnaround seems to be happening, and I hope to make small profit by years' end, and hopefully more next year. My question is: can I carry last year's loss to this year's (or next year's) profits, and write off the loss against anything I make (until my profits exceed my loss of last year)? Any insight appreciated, thanks in advance.
  2. ashkelon


    Thanks for the reply. However, because of my frequency and type of trading, I won't be filing under 'capital gains/loss'; this category, as I understand it, is for investment-type income. Since I trade frequently, probably thousands of trades a year, I think CRA wouldn't allow this. Therefore I will need to declare any income as a business income. But what about losses? Assuming that people who own businesses can also on occasion incur years of negative income. Are they then able to carry forward losses to future years?
  3. I'm pretty sure you can carry business losses forward indefinitely as well. Keep in mind that the CRA will start to question the business if you're always showing losses. Check with an accountant to be sure.

    In terms of capital gains it's definitely beneficial to claim gains this way due to the lower tax treatment. I'm not a day trader but I place a lot of trades every year and always claim them as capital gains. Depends on your situation.
  4. ashkelon