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Corporation Loss Continuity and Application (2013 and later (Government of Canada)

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Corporation Loss Continuity and Application
(2013 and later tax years)
Schedule 4
Code 1302
Protected B
when completed
Corporation's name Business number
Tax year-end
Year Month Day
• Use this form to determine the continuity and use of available losses; to determine a current-year non-capital loss, farm loss, restricted farm loss, or limited
partnership loss; to determine the amount of restricted farm loss and limited partnership loss that can be applied in a year; and to ask for a loss carryback
to previous years.
• A corporation can choose whether or not to deduct an available loss from income in a tax year. The corporation can deduct losses in any order. However,
for each type of loss, deduct the oldest loss first.
•
According to subsection 111(4) of the Income Tax Act, when control has been acquired, no amount of capital loss incurred for a tax year ending before that
time is deductible in computing taxable income in a tax year ending after that time. Also, no amount of capital loss incurred in a tax year ending after that
time is deductible in computing taxable income of a tax year ending before that time.
• When control has been acquired, subsection 111(5) provides for similar treatment of non-capital and farm losses, except as listed in
paragraphs 111(5)(a) and (b).
•
For information on these losses, see the T2 Corporation – Income Tax Guide.
• File one completed copy of this schedule with the T2 return, or send the schedule by itself to the tax centre where the return is filed.
•
All legislative references are to the Income Tax Act.
Part 1 – Non-capital losses
Determination of current-year non-capital loss
A
Net income (loss) for income tax purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deduct: (increase a loss)
a
Net capital losses deducted in the year (enter as a positive amount) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
b
Taxable dividends deductible under section 112 or subsections 113(1) or 138(6) . . . . . . . . . . . . . . . . . .
c
Amount of Part VI.1 tax deductible under paragraph 110(1)(k) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
d
Amount deductible as prospector's and grubstaker's shares – Paragraph 110(1)(d.2) . . . . . . . . . . . . . . .
B
Subtotal (total of amounts a to d)
◄
C
Subtotal (amount A minus amount B; if positive, enter "0")
Deduct: (increase a loss)
D
Section 110.5 or subparagraph 115(1)(a)(vii) – Addition for foreign tax deductions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
E
Subtotal (amount C minus amount D)
Add: (decrease a loss)
F
Current-year farm loss (the lesser of: the net loss from farming or fishing included in
income and the non-capital loss before deducting the farm loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
G
Current-year non-capital loss (amount E plus amount F; if positive, enter "0") . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
If amount G is negative, enter it on line 110 as a positive.
Continuity of non-capital losses and request for a carryback
e
Non-capital loss at the end of the previous tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
100
f
Deduct: Non-capital loss expired (note 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
102
H
Non-capital losses at the beginning of the tax year (amount e minus amount f) . . . . . . . . . . . . . . . .
◄
Add:
105
g
Non-capital losses transferred on an amalgamation or on the wind-up of a subsidiary (note 2)
corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
110
h
Current-year non-capital loss (from amount G) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I
Subtotal (amount g plus amount h)
◄
J
Subtotal (amount H plus amount I)
Note 1: A non-capital loss expires as follows:
• after 10 tax years if it arose in a tax year ending after March 22, 2004, and before 2006; and
• after 20 tax years if it arose in a tax year ending after 2005.
An allowable business investment loss becomes a net capital loss after 10 tax years if it arose in a tax year ending after March 22, 2004.
Note 2:
Subsidiary is defined in subsection 88(1) as a taxable Canadian corporation of which 90% or more of each class of issued shares are owned by
its parent corporation and the remaining shares are owned by persons that deal at arm's length with the parent corporation.
T2 SCH 4 E (15)
(Vous pouvez obtenir ce formulaire en français à www.arc.gc.ca/formulaires ou en composant le 1-800-959-7775.)
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Protected B when completed
Part 1 – Non-capital losses (continued)
Deduct:
150
i
Other adjustments (includes adjustments for an acquisition of control) . . . . . . . . . . . . . . . . . . . . . .
140
j
Section 80 – Adjustments for forgiven amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
130
k
Non-capital losses of previous tax years applied in the current tax year . . . . . . . . . . . . . . . . . . . . .
Enter amount k on line 331 of the T2 Return.
135
l
Current and previous year non-capital losses applied against current-year
taxable dividends subject to Part IV tax (note 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
K
Subtotal (total of amounts i to l)
◄
LNon-capital losses before any request for a carryback (amount J minus amount K)
Deduct – Request to carry back non-capital loss to:
901
m
First previous tax year to reduce taxable income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
902
n
Second previous tax year to reduce taxable income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
903
o
Third previous tax year to reduce taxable income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
911
p
First previous tax year to reduce taxable dividends subject to Part IV tax . . . . . . . . . . . . . . . . . . . .
912
q
Second previous tax year to reduce taxable dividends subject to Part IV tax . . . . . . . . . . . . . . . . .
913
r
Third previous tax year to reduce taxable dividends subject to Part IV tax . . . . . . . . . . . . . . . . . .
M
Total of requests to carry back non-capital losses to previous tax years (total of amounts m to r)
◄
180
N
Closing balance of non-capital losses to be carried forward to future tax years (amount L minus amount M)
Note 3: Amount I is the total of lines 330 and 335 from Schedule 3, Dividends Received, Taxable Dividends Paid, and Part IV Tax Calculation.
Part 2 – Capital losses
Continuity of capital losses and request for a carryback
200
a
Capital losses at the end of the previous tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
205
b
Capital losses transferred on an amalgamation or on the wind-up of a subsidiary corporation . . . . .
A
Subtotal (amount a plus amount b)
◄
Deduct:
250
c
Other adjustments (includes adjustments for an acquisition of control) . . . . . . . . . . . . . . . . . . . . .
240
d
Section 80 – Adjustments for forgiven amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B
Subtotal (amount c plus amount d)
◄
C
Subtotal (amount A minus amount B)
210
D
Add: Current-year capital loss (from the calculation on Schedule 6, Summary of Dispositions of Capital Property) . . . . . . . . . .
e
Unused non-capital losses that expired in the tax year (note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
f
Allowable business investment losses (ABILs) that expired as non-capital losses at the end of the previous
tax year (note 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
215
g
Enter amount e or f, whichever is less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
220
E
ABILs expired as non-capital losses: line 215 multiplied by 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FSubtotal (total of amounts C to E)
Note
If there has been an amalgamation or a wind–up of a subsidiary, do a separate calculation of the ABIL expired as
non-capital loss for each predecessor or subsidiary corporation. Add all these amounts and enter the total on line 220 above.
Note 4: If the loss was incurred in a tax year ending after March 22, 2004, determine the amount of the loss from the 11th previous tax year and enter
the part of that loss that was not used in previous years and the current year on line e.
Note 5:
If the ABILs were incurred in a tax year ending after March 22, 2004, enter the amount of the ABILs from the 11th previous tax year. Enter the full
amount on line f.
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Protected B when completed
Part 2 – Capital losses (continued)
225
G
Deduct: Capital losses from previous tax years applied against the current-year net capital gain (note 6) . . . . . . . . . . . . . . . . .
H
Capital losses before any request for a carryback (amount F minus amount G)
Deduct – Request to carry back capital loss to (note 7):
951
h
First previous tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
952
i
Second previous tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
953
j
Third previous tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I
Subtotal (total of amounts h to j)
◄
280
J
Closing balance of capital losses to be carried forward to future tax years (amount H minus amount I)
Note 6:
To get the net capital losses required to reduce the taxable capital gain included in the net income (loss) for the current-year tax, enter the
amount from line 225 divided by 2 at line 332 of the T2 return.
Note 7: On line 225, 951, 952, or 953, whichever applies, enter the actual amount of the loss. When the loss is applied, divide this amount by 2. The
result represents the 50% inclusion rate.
Part 3 – Farm losses
Continuity of farm losses and request for a carryback
a
Farm losses at the end of the previous tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
300
b
Deduct: Farm loss expired (note 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
302
A
Farm losses at the beginning of the tax year (amount a minus amount b) . . . . . . . . . . . . . . . . . . . .
◄
Add:
305
c
Farm losses transferred on an amalgamation or on the wind–up of a subsidiary corporation . . . . .
310
d
Current-year farm loss (amount F in Part 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B
Subtotal (amount c plus amount d)
◄
C
Subtotal (amount A plus amount B)
Deduct:
350
e
Other adjustments (includes adjustments for an acquisition of control) . . . . . . . . . . . . . . . . . . . . . .
340
f
Section 80 – Adjustments for forgiven amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
330
g
Farm losses of previous tax years applied in the current tax year . . . . . . . . . . . . . . . . . . . . . . . . . .
Enter amount g on line 334 of the T2 Return.
335
h
Current and previous year farm losses applied against
current-year taxable dividends subject to Part IV tax (note 9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
D
Subtotal (total of amounts e to h)
◄
E
Farm losses before any request for a carryback (amount C minus amount D)
Deduct – Request to carry back farm loss to:
921
i
First previous tax year to reduce taxable income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
922
j
Second previous tax year to reduce taxable income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
923
k
Third previous tax year to reduce taxable income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
931
l
First previous tax year to reduce taxable dividends subject to Part IV tax . . . . . . . . . . . . . . . . . . .
932
m
Second previous tax year to reduce taxable dividends subject to Part IV tax . . . . . . . . . . . . . . . . .
933
n
Third previous tax year to reduce taxable dividends subject to Part IV tax . . . . . . . . . . . . . . . . . . .
F
Subtotal (total of amounts i to n)
◄
380
G
Closing balance of farm losses to be carried forward to future tax years (amount E minus amount F)
Note 8:
A farm loss expires as follows:
• after 10 tax years if it arose in a tax year ending before 2006; and
• after 20 tax years if it arose in a tax year ending after 2005.
Note 9: Amount h is the total of lines 340 and 345 from Schedule 3.
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Protected B when completed
Part 4 – Restricted farm losses
Current-year restricted farm loss
485
A
Total losses for the year from farming business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Minus the deductible farm loss:
a(amount A above
−
$2,500) divided by 2
=
b
Amount a or $15,000 (note 10), whichever is less . . . . . . . . . . . . . . .
◄
c
B
Subtotal (amount b plus amount c)
◄
C
Current-year restricted farm loss (amount A minus amount B)
Continuity of restricted farm losses and request for a carryback
d
Restricted farm losses at the end of the previous tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
400
e
Deduct: Restricted farm loss expired (note 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
402
D
Restricted farm losses at the beginning of the tax year (amount d minus amount e) . . . . . . . . . . . .
◄
Add:
405
f
Restricted farm losses transferred on an amalgamation or on the wind-up
of a subsidiary corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
410
g
Current-year restricted farm loss (from amount C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Enter amount g on line 233 of Schedule 1, Net Income (Loss) for Income Tax Purposes.
E
Subtotal (amount f plus amount g)
◄
F
Subtotal (amount D plus amount E)
Deduct:
430
h
Restricted farm losses from previous tax years applied against current farming income . . . . . . . . .
Enter amount h on line 333 of the T2 return.
440
i
Section 80 – Adjustments for forgiven amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
450
j
Other adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
G
Subtotal (total of amounts h to j)
◄
H
Restricted farm losses before any request for a carryback (amount F minus amount G)
Deduct – Request to carry back restricted farm loss to:
941
k
First previous tax year to reduce farming income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
942
l
Second previous tax year to reduce farming income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
943
m
Third previous tax year to reduce farming income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I
Subtotal (total of amounts k to m)
◄
480
J
Closing balance of restricted farm losses to be carried forward to future tax years (amount H minus amount I)
Note
The total losses for the year from all farming businesses are calculated without including scientific research expenses.
Note 10:
For tax years that end before March 21, 2013, use $6,250 instead of $15,000.
Note 11:
A restricted farm loss expires as follows:
• after 10 tax years if it arose in a tax year ending before 2006; and
•
after 20 tax years if it arose in a tax year ending after 2005.
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2,500
Protected B when completed
Part 5 – Listed personal property losses
Continuity of listed personal property loss and request for a carryback
a
Listed personal property losses at the end of the previous tax year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
500
b
Deduct: Listed personal property loss expired after 7 tax years. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
502
A
Listed personal property losses at the beginning of the tax year (amount a minus amount b) . . . . . .
◄
510
B
Add: Current-year listed personal property loss (from Schedule 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C
Subtotal (amount A plus amount B)
Deduct:
530
c
Listed personal property losses from previous tax years applied against listed
personal property gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Enter amount c on line 655 of Schedule 6.
550
d
Other adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
D
Subtotal (amount c plus amount d)
◄
E
Listed personal property losses remaining before any request for a carryback (amount C minus amount D)
Deduct – Request to carry back listed personal property loss to:
961
e
First previous tax year to reduce listed personal property gains . . . . . . . . . . . . . . . . . . . . . . . . . . .
962
f
Second previous tax year to reduce listed personal property gains . . . . . . . . . . . . . . . . . . . . . . . .
963
g
Third previous tax year to reduce listed personal property gains . . . . . . . . . . . . . . . . . . . . . . . . . .
F
Subtotal (total of amounts e to g)
◄
580
G
Closing balance of listed personal property losses to be carried forward to future tax years (amount E minus amount F)
Part 6 – Analysis of balance of losses by year of origin
Year of origin Non-capital losses (note 12) Farm losses Restricted farm losses Listed personal property losses
Total
Note 12:
A non-capital loss expires as follows:
•
after 10 tax years if it arose in a tax year ending after March 22, 2004, and before 2006; and
• after 20 tax years if it arose in a tax year ending after 2005.
An allowable business investment loss becomes a net capital loss after 10 tax years if it arose in a tax year ending after March 22, 2004.
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Protected B when completed
Part 7 – Limited partnership losses
Current-year limited partnership losses
1
Partnership account number
600
2
Tax year
ending
yyyy/mm/dd
602
3
Corporation's
share of limited
partnership loss
604
4
Corporation's
at-risk amount
606
5
Total of
corporation's share
of partnership
investment tax
credit, farming
losses, and
resource expenses
608
6
Column 4 minus
column 5
(if negative,
enter "0")
7
Current -year
limited
partnership
losses
(column 3 minus
column 6)
620
1.
2.
3.
4.
5.
Total (enter this amount on line 222 of Schedule 1)
Limited partnership losses from previous tax years that may be applied in the current year
1
Partnership account number
630
2
Tax year
ending
yyyy/mm/dd
632
3
Limited
partnership losses at
the end of the previous
tax year
and amounts
transferred on an
amalgamation or on the
the wind-up of a
subsidiary
634
4
Corporation's
at-risk amount
636
5
Total of
corporation's share
of partnership
investment tax
credit, business or
property losses, and
resource expenses
638
6
Column 4 minus
column 5
(if negative,
enter "0")
7
Limited partnership
losses that may be
applied in the year
(the lesser of
column 3 and 6)
650
1.
2.
3.
4.
5.
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Protected B when completed
Part 7 – Limited partnership losses (continued)
Continuity of limited partnership losses that can be carried forward to future tax years
1
Partnership account number
660
2
Limited partnership
losses at the end of
the previous tax
year
662
3
Limited partnership
losses transferred
in the year on an
amalgamation or on
the wind-up of a
subsidiary
664
4
Current-year limited
partnership losses
(from line 620)
670
5
Limited partnership
losses applied in
the current year
(must be equal to
or less than
line 650)
675
6
Current year limited
partnership losses
closing balance to
be carried forward to
future years
(column 2 plus column 3
plus column 4
minus column 5)
680
1.
2.
3.
4.
5.
Total (enter this amount on line 335 of the T2 return)
Note
If you need more space, you can attach more schedules.
Part 8 – Election under paragraph 88(1.1)(f)
190
If you are making an election under paragraph 88(1.1)(f), check the box . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Yes
In the case of the wind-up of a subsidiary, if the election is made, the non-capital loss, restricted farm loss, farm loss, or limited partnership loss of the
subsidiary—that otherwise would become the loss of the parent corporation for a particular tax year starting after the the wind–up began—will be considered
as the loss of the parent corporation for its immediately preceding tax year and not for the particular year.
Note
This election is only applicable for wind-ups under subsection 88(1) that are reported on Schedule 24, First-Time Filer after Incorporation, Amalgamation,
or Winding-up of a Subsidiary into a Parent.
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R Z
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R Z
R Z
R Z
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Corporation Loss Continuity and Application (2013 and later (Government of Canada)

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