CRA Schedule 3 Capital Gains and Losses

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Joined: Wed Mar 20, 2019 7:19 pm

CRA Schedule 3 Capital Gains and Losses

Post by papillary »

I am trying to figure out how this is supposed to work. So I have some money overseas that is gaining good interested and reported on my Canadian taxes. Unfortunately the value of the currency in this country went down a lot and let us say if for example I had 10,000 worth in USD, now the money is worth $4,000 so I lost more than half the worth of my money. Thus on one hand although I did gain interest in the first half of the year, but before the currency depreciated any more I converted it from that local currency to USD to protect what is left of my money. Just reporting the interest gain by itself would have me pay X amount but that is not taking into consideration the huge loss I incurred. But on the CRA form it says that first on line 21 I am to multiply my loss value with 50% then on line 22 it says "Line 20 multiplied by the percentage (50%) on line 21 (If the result is positive, enter it on line 12700 of your return. If the result is negative (loss), read the instructions below.)"
"If the amount on line 22 is negative (loss), do not report the amount on line 12700 of your return. Your latest notice of assessment or reassessment will provide you with the amount of the loss you may be able to use to reduce your taxable capital gains of other years.
If you have a net capital loss in 2020 and would like to apply it against taxable capital gains you reported on your 2017, 2018, or 2019 return, complete Form T1A, Request for Loss Carryback.
You can carry forward your net capital losses indefinitely and apply them against your taxable capital gains in the future."

This means I would have to pay the taxes I owe on the gained interest, and then CRA will figure out my losses and refund me the money I paid them?
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Re: CRA Schedule 3 Capital Gains and Losses

Post by nelsona »

The paragraph you quoted applies to you. You can only trigger the loss when you sell. Until then you must still report the yearly income, and pay tax.

Capital losses will only count against capital gains, which you do not seem to have, Interst is not capital gains.

This is not really a cross-border tax issue, so please consult other forums for this.
I am taking my usual break from this site until May. Always too many tax-form specific questions at this time of year...
nelsona non grata. Non pro. Search previous posts. Happy Browsing :D
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