T936: Calculation of Cumulative Net Investment Loss (CNIL)

The T936 form calculates your cumulative net investment loss (CNIL) for your investment income or investment expenses. Your CNIL is how much more your investment expenses were, compared to your investment income. It’s used to calculate the capital gains deduction that you can claim on the sale of qualified capital property.

Your CNIL reduces your cumulative gain limit and it might affect the amount of capital gains deduction you’ll be allowed for the year. Even if you’re not claiming a capital gains deduction, you’ll need to complete this form if you had investment income or investment expenses.

Remember: Since the CNIL is a cumulative total, make sure keep a record of your completed T936 in case you need to reference it in the future.

If you’re a Québec resident, you’ll need to complete the TP-726.6-V: Cumulative Net Investment Loss form before you calculate your CNIL.

What is investment income?

Your investment income can include:

  • Investment income (taxable amount of eligible and other than eligible dividends from taxable Canadian corporations and interest and other investment income such as foreign interest and dividends)
  • 50% of income from the recovery of exploration and development expenses
  • Net rental income including recaptured capital cost allowance (CCA)
  • Net income from limited or non-active partnership other than taxable capital gains
  • Other property income, including annuity payments taxable under paragraph 56(1)(d) minus the capital portion deducted under paragraph 60(a)*, such as:
    • Insurance proceeds for the recapture of capital cost allowance
    • Home insulation or energy conversion grants
    • Payments given as an inducement or reimbursement
    • Income from the appropriation of property to a shareholder
    • Farming and fishing income reported by a non-active or a limited partner
    • CPP or QPP death benefit payments reported on your return
    • Amounts withdrawn from AgriInvest Fund 2

*This means, include any annuity payments that need to be included in your income for the year minus any for which you claimed a deduction for on your return.

Don’t include amounts that relate to your business income, payments received from an income-averaging annuity contract, shareholder’s loans included in income on this form. See the T936 form for more information on the investment income that can't be included on this form.

What are investment expenses?

Your investment expenses can include:

  • Carrying charges and interest expenses
  • 50% of exploration and development expenses
  • Losses from rental, limited or non-active partnership other than allowable capital losses, and limited partnership losses of other years after 1985
  • Other investment expenses paid to earn property income such as:
    • Farming or fishing losses claimed by a non-active partner or a limited partner
    • Foreign non-business tax under subsections 20(11) and 20(12)
    • Repayments of inducements and refund interest
    • The uncollectible portion of proceeds from dispositions of depreciable property (except passenger vehicles that cost more than $30,000)
    • Life insurance premiums deducted from property income
    • Capital cost allowance (CCA) claimed on certified films or videotapes
    • Sale of agreement for sale or mortgage included in proceeds of disposition in a previous year under subsection 20(5)

Note: You’ll only need to include amounts for your other investment expenses on the T936 page in H&R Block’s tax software. Investment expenses entered elsewhere on your return in the software will automatically be used to calculate your CNIL.

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Don’t include expenses you paid to earn business income or interest paid on money borrowed to contribute to your RRSP, on this form. See the T936 form for more information on the investment expenses that can't be included on this form.

Where can I find the total amount of investment expense and income from previous years?

You can find the total amount of investment expenses and income from previous years on the following lines of your 2017 T936:

  • Line 16 for investment expenses
  • Line 19 for investment income

If, however, you didn’t complete the T936 form in 2017, you’ll need to manually calculate the amounts you’ve claimed or reported in previous years:

Investment expenses claimed in previous years (after 1987)

  1. Complete Part 1 of form T936 for each year from 1988 to 2017 in which you had investment expenses (don’t complete line 7 for 1988 to 1991).
  2. Add the amounts from line A of each T936
  3. Enter the total from step 2 into the designated field on the T936 page in H&R Block’s tax software.

Investment income reported in previous years (after 1987)

  1. Complete Part 2 of form T936 for each year from 1988 to 2017 in which you had investment income (don’t complete line 13 for 1988 to 1991).
  2. Add the amounts from line B of each T936
  3. Enter the total from step 2 into the designated field on the T936 page in H&R Block’s tax software.

Where do I claim this?        

Follow these steps in H&R Block's 2018 tax software:

  1. Under the PREPARE tab, click the IN THIS SECTION icon.

  2. In the Investments box, click the Add This Topic button.

  3. Click the PENSION PLANS AND INVESTMENTS icon. You'll find yourself here: 

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  4. Under the INVESTMENT INCOME heading, select the checkbox labelled Calculation of cumulative net investment loss to December 31, 2018 (T936).

  5. When you arrive at the T936 page, enter your information in the tax software. 

Where can I learn more?

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