Tax Loss Selling – DENIED

A strategy used to help reduce taxable income. In a non-registered account, selling securities that have decreased in value will trigger a realized capital loss. CRA allows you to offset this loss against realized capital gains.

Tax Loss Selling Rules

  • Superficial loss rule – The security cannot be repurchased within the period beginning and ending 30 days before and after the sale
  • Affiliated accounts - The same security can not be repurchased in an affiliated account such as your RRSP, TFSA and RRIF
  • Affiliated person - The same security can not be repurchased by an affiliated person or entity such as your spouse, common law partner, a corporation you have control over, or a trust where you hold majority interest
  • The deadline – If selling a security at a loss, the trade must settle before the last business day of the calendar year

It’s important to know these rules, otherwise your claim could be denied. Be sure to speak with your Accountant to ensure this strategy is right for you.