ITA 3(b) requires the taxpayer to "determine the amount, if any, by which taxable capital gains exceed allowable capital losses". The rule that is established by this phrase is that:

A.

the current year allowable capital losses can only be deducted to the extent that there are taxable capital gains during the current year.

B.

unused allowable capital losses are deductible against any type of income in one of the past 3 years or in a future year.

C.

taxable capital gains are only included in income in a year when there are also allowable capital losses that can be used to reduce the effect on income.

D.

allowable capital losses in excess of taxable capital gains during a year are never deductible from net income.