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What happens when a company I invested in goes out of business? Is that declared as a personal capital loss? Does it offset capital gains elsewhere, and how do I include it in my tax filing?

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If this was a public corporation (stock) and the investment was made in a non-registered account, then you can claim a capital loss. Capital losses are claimed against capital gains (not income), and can be carried back 3 years or carried forward indefinitely.

Here's an article I've written on how to claim capital losses that may help.

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Since you say the money was invested in a corporation that would lead me to believe you mean a stock purchase. Stock losses can be treated as a tax exemption filed as a capital loss.

http://moneycentral.msn.com/content/Taxes/Cutyourtaxes/P33438.asp

http://www.usatoday.com/money/perfi/columnist/krantz/2006-03-10-capital-losses_x.htm

Canada has slightly more restrictions on how this can be done.

http://www.taxtips.ca/filing/capitallosses.htm

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