So typically the Capital Gains section has 4 questions:
- Total current year capital gains
- Net capital gain
- Net capital loss carried forward to later income years
- Credit for foreign resident capital gains withholding amounts
My understanding is that capital losses can be rolled forward indefinetly.
Here's a hypothetical. In FY2022, there is 2K of capital losses which is filed then rolled forward.
Now in the FY2023 tax return you would see 2K capital losses show up prefilled, if I have 5K of capital gains, then 1K of capital losses that year (i.e. net 4K capital gain for that FY).
Would I put 5K or 4K for the first entry?
And then for the second entry, would I just put 2K (5K - 1K - 2K (from prev FY))?
Also just curious for the second entry why this process hasn't been automated to just automatically deduct the capital losses from previous years. Are you allowed to deduct it only partially..? For e.g. Only "use" up 1K of the 2K capital loss from prev FY? And then use that remaining 1K for future FYs?
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