CRA intimates that it generally will process capital losses that a deceased missed claiming if now claimed within the s. 152(4.2) 10-year period

In the context of the executors discovering that the deceased had not claimed an allowable capital loss in a taxation year that was before the normal reassessment period, CRA indicated that, provided that a request to it to amend the return for the particular taxation year was made by the day that was 10 calendar years after the end of that year, CRA generally would provide relief pursuant to s. 152(4.2) where it was satisfied that the request for adjustment would have been processed if it had been made within the normal reassessment period.

If the loss was realized before rather than within this 10-year period, the loss thus could not be used to reduce Part I tax on a smaller taxable capital gain realized in that same year, even though such taxable capital gain would have the effect of reducing the net capital loss that could otherwise be carried forward from that year. However, that (reduced) net capital loss could be claimed to reduce a taxable capital gain realized in, say, 2015 under a request made pursuant to s. 152(4.2) in 2023.

Neal Armstrong. Summary of 20 June 2023 STEP Roundtable, Q.2 under s. 152(4.2).