How to declare capital loss from investment on your personal income tax report?

I have capital loss to be declared. however my accountant said that according to law I can only declare net 50% of loss. Let's say if I lost 10000$ then only 5000$ could be declared in my personal income report. I am not sure if this is correct. Please clarify for me how it works. Details: invested into small incorporated business, purshased business in January and sold in November same year, capital loss, I was the only one president. Thanks in advance

Public Comments

1. Your accountant is right that your loss is only 50% allowable, as it seems that you sold the shares of your corporation to an arm's length party at a loss. A capital gain results from a sale or deemed disposition of a capital property, such as an investment-related instrument (e.g., stock), when it is sold for more than its ACB, less any disposition expenses incurred, like commissions. Unlike ordinary income however, only 50 per cent of the gain is included in income. When investors experience a loss, there is only 50 per cent “allowable capital loss”. However, a loss realized from the arm’s-length sale of shares or qualifying debt of an Small Business Corporation (SBC) may qualify as a business-investment loss. Similarly, a loss upon the deemed disposition of an uncollectible debt of an SBC or the shares of a bankrupt SBC may qualify. A business-investment loss is calculated the same way as a capital loss, except that it may be applied against all income, not just capital gains. One-half of the business-investment loss may be applied against other income in the year the loss is realized. Unused portions of an allowable business-investment loss may be carried back three years, with the balance carried forward 10 years.
2. Your accountant is correct. If you had realized a gain, only 50% would have been taxable. So with a loss, it's only 50% deductible. But really, why would you listen to unknown strangers (who could be making this stuff up, or just be stupid, or (as is usually the case on here) be referring to US law?) over your accountant? If you have that little confidence in your accountant, get a new one.