The T1A allows you to carry a client's net capital loss back for up to three years to be applied against the taxable capital gains of those years. Therefore, you will do this ONLY if your client has taxable gains in those years and will use ONLY the amount of net capital loss which will zero out those taxable gains. You will apply the net capital loss to any gains the third year back. If you still have some net capital losses unused after clearing the taxable capital gains for that year, you will apply the rest to the second year back - again to the limit of the gains for that year. Again, if you still have some net capital losses available, you will apply them to taxable capital gains for last year. If your client had a really bad year, you may still have unused net capital losses and they will be carried forward to be applied against taxable capital gains in future years.
Since you are applying the net capital loss against past tax returns, you will NOT see anything on the 2022 tax return. Instead, CRA will adjust those returns where you are applying the loss and your client will receive a refund based on those reassessments and for those years.
Conversely, if your client had an unused net capital loss in the past (the NOA will say) and has taxable capital gains in 2022, then that unused net capital loss would be carried forward and you would see it on line 25300 under Step 4 of the T1. Again, the amount of net capital loss used would only be the amount sufficient to essentially zero out the taxable capital gain, with any excess being carried forward for future use. In this case, there would be a reduction of taxable income on the T1 once the net capital loss was entered.
Hope this helps.
Jo
