In terms of taxation, how are capital losses realized in a registered account handled?

Capital losses realized in a registered account, such as an RRSP or TFSA in Canada, are not recognized for tax purposes. This is primarily because registered accounts offer tax deferral or tax sheltering benefits. Any gains or losses within these accounts do not affect one's taxable income until funds are withdrawn from the account.

In a registered account, the investments grow tax-free, and although the account holder will not pay taxes on capital gains within the account, they also do not receive any tax benefit from capital losses. This means that if an investment within such an account incurs a capital loss, that loss has no impact on the individual's current or future tax situation while the funds remain in the account.

Other choices, such as reducing taxable income immediately or being carried forward indefinitely, do not apply in this context because registered accounts operate under different tax rules than non-registered accounts. Therefore, the most accurate understanding is that capital losses in registered accounts are not counted for tax purposes.