ABIL vs. Capital

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cappy2010
Posts: 3
Joined: Wed Feb 17, 2010 2:50 pm

ABIL vs. Capital

Post by cappy2010 »

I gather that an ABIL essentially covers investments in small business, whereas a capital gain is tied to larger businesses, arms-length securities and traded securities. My question is: is there no circumstance where investment into a small business (that goes bad) is a capital loss, aside from not being able to use an ABIL during the 7 year period after incurring it? Does one HAVE to use the ABIL during that 7 years or is it an election?

Maybe a better way to ask this is: is there a general rule whether it is better to take an ABIL or Capital Loss?

thanks
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