Which of the following items is NOT a taxable income deduction for an individual? a. Worker's compensation payments received as a result of injury b. A deduction for residing in a prescribed northern zone c. A net capital loss d. A current year business loss

The answer is **c. A net capital loss**.<br /><br />Here's why:<br /><br />* **a. Worker's compensation payments:** These are generally not taxable. They are intended to replace lost wages due to a work-related injury and are therefore not considered income.<br /><br />* **b. A deduction for residing in a prescribed northern zone:** This is a specific deduction allowed in some tax systems (like Canada) to offset the higher cost of living in remote areas. It reduces taxable income.<br /><br />* **c. A net capital loss:** While capital losses *can* be used to offset capital gains and reduce taxable income, a *net* capital loss (meaning losses exceed gains) isn't a deduction in the same way the other options are. It's applied against capital gains, and any excess can be carried forward or back to offset gains in other years. It doesn't directly reduce other types of income.<br /><br />* **d. A current year business loss:** Business losses can be deducted from other income, reducing the overall taxable income.<br /><br />Therefore, a net capital loss is not a direct deduction from taxable income in the same way the other options are. It has specific rules for how it can be used.<br />