Comments on: Superficial Loss Rules in Canada http://wheredoesallmymoneygo.com/superficial-loss-rules-in-canada/ A personal finance blog written by Preet Banerjee Thu, 09 Sep 2010 05:57:13 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Capital Loss Transfer http://wheredoesallmymoneygo.com/superficial-loss-rules-in-canada/#comment-5862 Capital Loss Transfer Wed, 16 Jun 2010 03:35:40 +0000 http://www.wheredoesallmymoneygo.com/?p=983#comment-5862 [...] You can read about superficial loss rules in more detail here (and why they aren’t THAT big of.... Essentially, if you sell a security at a capital loss and then buy back that same security within 30 calendar days you lose the ability to claim that capital loss – this is known as a superficial loss. [...] [...] You can read about superficial loss rules in more detail here (and why they aren’t THAT big of…. Essentially, if you sell a security at a capital loss and then buy back that same security within 30 calendar days you lose the ability to claim that capital loss – this is known as a superficial loss. [...]

]]> By: Preet http://wheredoesallmymoneygo.com/superficial-loss-rules-in-canada/#comment-5859 Preet Wed, 16 Jun 2010 02:29:30 +0000 http://www.wheredoesallmymoneygo.com/?p=983#comment-5859 Hi Matt, especially with specific advice you will want to verify with your own professional, but: The loss (superficial loss in this case) is added to your spouse's Adjusted Cost Base. In your specific example she would add $10 (your superficial loss) to her purchase price of $50 for an ACB of $60. She would need to hold on to the shares for at least 30 days though. Welch, LLP put out this information which might be of interest: http://www.welchllp.com/publications/news/Income_Splitting.pdf Hi Matt, especially with specific advice you will want to verify with your own professional, but:

The loss (superficial loss in this case) is added to your spouse’s Adjusted Cost Base. In your specific example she would add $10 (your superficial loss) to her purchase price of $50 for an ACB of $60. She would need to hold on to the shares for at least 30 days though.

Welch, LLP put out this information which might be of interest: http://www.welchllp.com/publications/news/Income_Splitting.pdf

]]> By: Matt http://wheredoesallmymoneygo.com/superficial-loss-rules-in-canada/#comment-5844 Matt Mon, 14 Jun 2010 23:09:23 +0000 http://www.wheredoesallmymoneygo.com/?p=983#comment-5844 I i trigger the superfical loss rules after completing a precribed rate to my spouse, does the asset assume my original cost base? ie: I buy RY shares at $60, sell at $50 within 30 days following this sale, I make a loan to my spouse and she uses the loan proceeds to buy RY at $50. Is her ACB $60? I i trigger the superfical loss rules after completing a precribed rate to my spouse, does the asset assume my original cost base?

ie: I buy RY shares at $60, sell at $50
within 30 days following this sale, I make a loan to my spouse and she uses the loan proceeds to buy RY at $50.
Is her ACB $60?

]]> By: Forex Trading: Income or Capital Gain Tax in Canada? | Quantisan.com http://wheredoesallmymoneygo.com/superficial-loss-rules-in-canada/#comment-2699 Forex Trading: Income or Capital Gain Tax in Canada? | Quantisan.com Thu, 08 Apr 2010 00:39:34 +0000 http://www.wheredoesallmymoneygo.com/?p=983#comment-2699 [...] a sale at a loss, then that initial loss cannot be deducted as a capital loss.  More about the Superficial Loss rules in Canada can be found at [...] [...] a sale at a loss, then that initial loss cannot be deducted as a capital loss.  More about the Superficial Loss rules in Canada can be found at [...]

]]> By: Superficial Loss vs Capital Loss Rules in Canada http://wheredoesallmymoneygo.com/superficial-loss-rules-in-canada/#comment-2698 Superficial Loss vs Capital Loss Rules in Canada Thu, 25 Feb 2010 18:04:59 +0000 http://www.wheredoesallmymoneygo.com/?p=983#comment-2698 [...] Link to a nice summary (with examples) of superficial loss rules vs capital loss rules in Canada. [...] [...] Link to a nice summary (with examples) of superficial loss rules vs capital loss rules in Canada. [...]

]]> By: Laura http://wheredoesallmymoneygo.com/superficial-loss-rules-in-canada/#comment-2696 Laura Sat, 04 Apr 2009 20:54:46 +0000 http://www.wheredoesallmymoneygo.com/?p=983#comment-2696 You're right, I should have been more careful to check the date on the article. With that misinformation in my head you can interpret what Gordon is saying incorrectly - my apologies!!! Laura You’re right, I should have been more careful to check the date on the article. With that misinformation in my head you can interpret what Gordon is saying incorrectly – my apologies!!!
Laura

]]> By: Preet http://wheredoesallmymoneygo.com/superficial-loss-rules-in-canada/#comment-2695 Preet Fri, 03 Apr 2009 20:12:54 +0000 http://www.wheredoesallmymoneygo.com/?p=983#comment-2695 @ Laura, Charles in Vancouver has kindly taken the words right out of my mouth - I am in full agreement with his comments. My belief is that you CANNOT sell, contribute and re-purchase the same securities (or even substantially the same securities) inside a TFSA or RRSP within 30 days and expect to claim a capital loss. But again, best to refer to your own tax professional for specific advice. Thanks to you both for your comments. @ Laura, Charles in Vancouver has kindly taken the words right out of my mouth – I am in full agreement with his comments. My belief is that you CANNOT sell, contribute and re-purchase the same securities (or even substantially the same securities) inside a TFSA or RRSP within 30 days and expect to claim a capital loss. But again, best to refer to your own tax professional for specific advice. Thanks to you both for your comments.

]]> By: Charles in Vancouver http://wheredoesallmymoneygo.com/superficial-loss-rules-in-canada/#comment-2694 Charles in Vancouver Fri, 03 Apr 2009 17:40:22 +0000 http://www.wheredoesallmymoneygo.com/?p=983#comment-2694 Laura: CRA says the capital loss will be denied. Canadian Financial DIY contacted CRA in 2007 and they confirmed it: http://canadianfinancialdiy.blogspot.com/2007/09/capital-losses-and-superficial-loss.html "Update Oct.10 - Finally got a call back from Revenue Canada and the answer is now NO, you are not allowed to do it, or more precisely, your capital loss will be declared superficial and denied on your tax return. The relevant subsection is 251.1 (g) of the Income Tax as modified in 2005." However since we seem to have a conflict between two sources, I will e-mail Gordon myself and ask him if his advice is in conflict with those links. Laura: CRA says the capital loss will be denied. Canadian Financial DIY contacted CRA in 2007 and they confirmed it:

http://canadianfinancialdiy.blogspot.com/2007/09/capital-losses-and-superficial-loss.html

“Update Oct.10 – Finally got a call back from Revenue Canada and the answer is now NO, you are not allowed to do it, or more precisely, your capital loss will be declared superficial and denied on your tax return. The relevant subsection is 251.1 (g) of the Income Tax as modified in 2005.”

However since we seem to have a conflict between two sources, I will e-mail Gordon myself and ask him if his advice is in conflict with those links.

]]> By: Laura http://wheredoesallmymoneygo.com/superficial-loss-rules-in-canada/#comment-2693 Laura Fri, 03 Apr 2009 16:40:29 +0000 http://www.wheredoesallmymoneygo.com/?p=983#comment-2693 Hello, Go to Chapters and take a look at Gordon Pape's new little red book on Tax Free Savings Accounts - you can read there about tax free savings acccounts and rrsp's - selling in your non-reg account and then immediately making a cash contribution and buying back same stocks in your tfsa or rrsp is a recommended strategy versus an in-kind contribution to these accounts, where you lose your ability to claim a tax loss but must claim any gain. Ask Gordon Pape. Hello,
Go to Chapters and take a look at Gordon Pape’s new little red book on Tax Free Savings Accounts – you can read there about tax free savings acccounts and rrsp’s – selling in your non-reg account and then immediately making a cash contribution and buying back same stocks in your tfsa or rrsp is a recommended strategy versus an in-kind contribution to these accounts, where you lose your ability to claim a tax loss but must claim any gain. Ask Gordon Pape.

]]> By: Charles in Vancouver http://wheredoesallmymoneygo.com/superficial-loss-rules-in-canada/#comment-2692 Charles in Vancouver Sun, 29 Mar 2009 16:41:19 +0000 http://www.wheredoesallmymoneygo.com/?p=983#comment-2692 Laura, the CBC link you just potsed is 8 years old... check out this post from Canadian Capitalist: http://www.canadiancapitalist.com/2008/01/27/superficial-loss-rules-regarding-rrsps Quote: "After March 2004, CRA considers a loss as superficial if “a trust and its majority interest beneficiary (generally, a beneficiary who enjoys a majority of the trust income or capital) or one who is affiliated with such a beneficiary” buys (or has the right to buy) a property during the period starting 30 calendar days before the sale and ending 30 calendar days after the sale. Since the RRSP is considered to be a trust and I am the beneficiary, my little plan won’t work anymore." Laura, the CBC link you just potsed is 8 years old… check out this post from Canadian Capitalist:
http://www.canadiancapitalist.com/2008/01/27/superficial-loss-rules-regarding-rrsps

Quote: “After March 2004, CRA considers a loss as superficial if “a trust and its majority interest beneficiary (generally, a beneficiary who enjoys a majority of the trust income or capital) or one who is affiliated with such a beneficiary” buys (or has the right to buy) a property during the period starting 30 calendar days before the sale and ending 30 calendar days after the sale. Since the RRSP is considered to be a trust and I am the beneficiary, my little plan won’t work anymore.”

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