ITA 3(b)requires the taxpayer to "determine the amount, if any, by which taxable capital gains exceed allowable capital losses". The rule that is established by this phrase is:
A)that allowable capital losses in excess of taxable capital gains during a year are never deductible from income.
B)that the current year allowable capital losses can only be deducted to the extent that there are taxable capital gains during the current year.
C)that taxable capital gains are only included in income in a year when there are also allowable capital losses that can be used to reduce the effect on income.
D)that unused allowable capital losses are deductible against any type of income in one of the past 3 years or in a future year.

Question

Quizplus · Accepted Answer

ITA 3(b) requires the taxpayer to determine the amount by which taxable capital gains exceed allowable capital losses. This means that current year allowable capital losses can only be deducted to the extent that there are taxable capital gains during the current year. If there are no taxable capital gains in the current year, the allowable capital losses can be carried forward to a future tax year or carried back to the past three tax years to offset any taxable capital gains in those years. However, the current year allowable capital losses cannot be deducted against any other type of income.

ITA 3(b)requires the Taxpayer to "Determine the Amount, If Any