Module 6: Capital gains and losses - PD Net

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Course Schedule Course Modules Review and Practice Exam Preparation Resources Self-test 6 solution 3 An allowable capital loss is one-half of the capital losses arising from the disposition of property in the year. A net capital loss is the excess of the allowable capital losses for a taxation year, over the total taxable capital gains for that year. In other words, an allowable capital loss is the actual loss amount that is eligible to be deducted, while a net capital loss is a "holding account" for allowable capital losses that are waiting to be used (offset against taxable capital gains). Net capital losses may be carried back three years, and/or carried forward indefinitely. file:///F|/Courses/2010-11/CGA/TX1/06course/m06selftestsol3.htm[11/10/2010 4:42:04 PM]
Course Schedule Course Modules Review and Practice Exam Preparation Resources Self-test 6 solution 4 A capital loss on PUP is never deductible for tax purposes. Any deficit between a taxpayer’s proceeds and his or her adjusted cost base for the property is considered to be an amount representing personal consumption. A capital loss on LPP is deductible for tax purposes, but only to the extent of any capital gains on LPP in that year. Any unused capital loss on LPP may be carried back three years, and/or forward seven years. The rationale is that the LPP items generally will at least retain their value because they are a collectible, rather than consumable. file:///F|/Courses/2010-11/CGA/TX1/06course/m06selftestsol4.htm[11/10/2010 4:42:05 PM]
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Page 5 and 6: substantial gains have accrued on t
Page 7 and 8: taxpayer motivation is also a facto
Page 9 and 10: Disposition costs When capital prop
Page 13 and 14: counting. LEVEL 2 Superficial losse
Page 17 and 18: Replacement property Where a taxpay
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Page 21 and 22: POD ACB Selling expenses Capital ga
Page 25 and 26: In 1988, Samara sold the shares for
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Page 39: 1981. The exempt portion is part of

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