Plain meaning
A loss from sources such as business or property that can generally be applied against income under carryback and carryforward rules.
Also called
business loss carryforward
non capital loss
loss carryback
Key points
- A non-capital loss can arise when allowable deductions from certain sources exceed income for a year.
- The loss can generally be carried back to prior years or carried forward to later years, subject to time limits and continuity rules.
- Corporations may face restrictions after an acquisition of control or major change in business activity.
- Loss claims should be supported by books, records, and schedules because they can affect multiple taxation years.
- Non-capital losses are different from net capital losses, which generally apply against taxable capital gains.
Why it comes up
Non-capital losses affect business cycles, corporate tax planning, reassessments, and budget measures about loss use.