How long can unused capital gain losses be carried forward?

Unused capital gain losses can be carried forward indefinitely to offset future capital gains. This means that if an individual does not use all of their capital losses in a given tax year, they can continue to carry those losses forward to subsequent tax years until they are completely utilized. This provision allows taxpayers to reduce their tax burden in future years if they have capital gains, thus promoting a more favorable tax situation.

The ability to carry forward capital losses is particularly beneficial in situations where an individual experiences fluctuating investment returns over the years. Taxpayers can strategically plan to use these losses when they anticipate realizing capital gains, ensuring they make the most of their losses to minimize tax liability.

The other choices reflect varying limitations that do not apply to the treatment of unused capital gain losses, as the indefinite carryforward option is specifically designed to provide taxpayers with flexibility and tax relief over an extended period.