TaxTips.ca
Canadian Tax and
Financial Information
Investment Losses

Ads keep this website free for you.
TaxTips.ca does not research or endorse any product or service appearing in ads on this site.  Before making a major financial decision you  should consult a qualified professional.

Looking for US tax information?
See
USTaxTips.net

Need an accounting, tax or financial advisor? Look in our Directory.      Stay Connected with TaxTips.ca!      Internet Explorer - Use compatibility view for calculators to work properly!

Home
What's New
Calculators
Personal Tax
Business
Sales Taxes
Free in 30!
Financial Planning
RRSP RRIF TFSA
Real Estate
Stocks Bonds etc.
Seniors
Disabilities
Canada
Alberta
British Columbia
Manitoba
Ontario
Quebec
Saskatchewan
Atlantic Provinces
Territories
Federal Budget
Provincial Budgets
Statistics etc.
Glossary
Site Map
Directory
Advertise With Us
Contact Us/About Us
Links & Resources



Personal Tax  ->  Stocks, Bonds etc.  -> Make Use of Investment Losses

Investment Losses - Make Use of Them

Income Tax Act s. 3, 40(2)(g)(iv), 111(1)(b)

If you have a capital loss on an investment outside of an RRSP, RRIF, TFSA or other registered account, you can sell the investment and utilize the capital loss to offset it against capital gains.  You can offset the capital losses against current year capital gains (not against other types of income), or you can carry back the losses to offset them against capital gains in any of the previous three years.  You can also carry the capital losses forward indefinitely, to be offset against future capital gains.

If you are selling the "loss" shares near the end of the year, make sure the settlement date (normally 3 business days after the trade date) will be on or before the last business day in December, to be included as a sale in the current year.

If desired, after you sell shares to utilize the loss, you can then repurchase them, but wait at least 30 days in order to avoid having your loss disallowed as a superficial loss.  The loss will also be a superficial loss if the shares are repurchased by a person affiliated with you, such as your spouse or common-law partner.

Do not transfer the shares to your RRSP or TFSA at a loss, because the losses will not be deductible at any time.

When losses are carried forward or back to another year, it is possible that this may increase an OAS clawback, or reduce certain tax credits.  See our article on how these losses, and some types of income which do not affect taxable income, can be very taxing!

Tax Tip:  If you have capital gains in the current year or any of the previous 3 years, you can sell your losing investments to offset the capital gains.

Revised: September 19, 2017

Copyright © 2002 - 2017 Boat Harbour Investments Ltd. All Rights Reserved  See Reproduction of information from TaxTips.ca

Facebook  | Twitter  |  Google + |  Monthly Newsletter Sign-up  What’s New E-mail Notification RSS News Feed
The information on this site is not intended to be a substitute for professional advice.  Each person's situation differs, and a professional advisor can assist you in using the information on this web site to your best advantage. 
Please see our legal disclaimer regarding the use of information on our site, and our Privacy Policy regarding information that may be collected from visitors to our site.