Glossary term
Allowable capital loss
An allowable capital loss is the portion of a capital loss recognized for tax purposes under capital-loss rules.
Plain meaning
What allowable capital loss means
A capital loss can arise when disposition proceeds are less than adjusted cost base plus outlays and expenses connected with the disposition. The allowable capital loss is the portion recognized under the applicable capital-loss inclusion-rate rule.
Formula role
How OpenBook uses it
When a capital-gain calculator produces a negative result, OpenBook output uses loss wording instead of gain wording. The calculator can then show an estimated allowable capital loss instead of a taxable capital gain.
Common boundary
Losses are not ordinary deductions
Capital losses are not generally treated the same way as ordinary expenses or deductions. Allowable capital losses are commonly applied against taxable capital gains, subject to tax rules and timing limits.
Primary references