Non-Capital Loss

A business loss is usually considered a non capital loss. Usually such a loss will come about when you have a year when you more expenses than you have revenues. Thus creating a loss of income for that particular year. This loss called a Non-capital loss at present can be currently carried forward for twenty years from its inception and carried back three years to offset all sources of income in those years. If you are going to be carrying back a loss then there a special form that has be used to adjust the previous years return.  You can also control how and when the loss will be utilized so for example if you have made money in past years and anticipate making money in future years you can decide which years you are going to allocate your loss toward. Thus best utilizing your loss can prove to be beneficial as a tax reduction strategy.