Allowable Business Investment Loss Or ABIL

An ABIL is one-half of a business investment loss, which is a special kind of capital loss. In general terms you may receive a business investment loss if you realize a capital loss on the disposition of shares or debt in a private-controlled Canadian corporation that has active business income.

Unlike other capital losses, an ABIL can be utilized against both taxable capital gains and other sources of income in a year. If you have an excess amount it can be carried back three years of or carried forward 10 years. If you still have some available after 10 years the available portion then can only be used to offset capital gains. So its always a good idea to check to see if you any ABIL that you can utilize to help reduces your taxes.