Duane Uba sold the shares of an arm's-length small business corporation in 2020, resulting in a capital loss of $2,000.If all of the conditions for an allowable business loss are met, Duane will recognize which of the following?

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Since Duane incurred a capital loss, he cannot claim an allowable business loss (which applies to losses from a business or property that was established or acquired by the taxpayer), but he can claim an ITA 3(d) deduction for half of the capital loss, which in this case is $1,000. This deduction can be used to reduce any taxable capital gains in the year or in the previous three years, or carried forward indefinitely to reduce future taxable capital gains.

Duane Uba Sold the Shares of an Arm's-Length Small Business