How much can I deduct from my losses with the Allowable Business Investment Loss Deduction?
You can deduct 50% of your allowable business investment loss (ABIL), which is calculated by deducting your business investment loss from your capital gains deduction.
How do I calculate my allowable business investment loss?
To calculate your allowable business investment loss, you need to subtract your business investment losses from your capital gains deductions to arrive at the ABIL amount, 50 percent of which is deductible.
How far back and forward can I use the ABIL deduction?
The ABIL can be applied three years back or 10 years forward from the year when the deduction was generated. If not used within the 10 years, the ABIL becomes a capital loss. As such, it can be carried forward indefinitely and claimed against capital gains only.
How do I qualify for the ABIL deduction?
You qualify for the Allowable Business Investement Loss Deduction only if the investment was made in a small business corporation, otherwise known as a Canadian Controlled Private Corporation (CCPC). A CCPC is a private corporation that substantially uses all of its assets in operating an active business in Canada.
