Sold at a loss and bought it back? The CRA may ignore the loss.
The superficial loss rule is the one trap every Canadian loss-harvester needs to know. Here is how it works and how to stay clear of it.
The rule, in plain words
- 1You sell an investment at a loss in a non-registered account.
- 2You, or someone close to you, buys the same investment in the 30 days before or the 30 days after the sale. That is a 61-day window with the sale in the middle.
- 3You still own it at the end of the 30 days after the sale. If all three are true, the CRA treats your loss as nil.
Counting starts from the settlement date, which is one business day after the trade for most stocks and ETFs. If you rebuy in another regular account, the denied loss is added to the cost base of what you bought, so you get it back when you finally sell. If your own RRSP or TFSA does the buying, the loss is lost for good.
Who counts as "someone close"?
You, your spouse or common-law partner, a corporation you or your spouse control, and your own RRSP, TFSA or other registered account. A household member buying the same ETF in a TFSA is the classic trap.
The safe moves: wait 31 days before buying back, or buy something similar but not identical. The CRA has given no ruling on specific funds, so any replacement should track a clearly different index, and none is guaranteed. The full guide explains what counts as identical.
Is this for me?
It may fit if you
- Planning to sell a losing investment and buy it back
- Share finances with a spouse who also invests
- Hold the same ETF in both a taxable account and a TFSA or RRSP
- Want to keep market exposure while you wait
Think twice if you
- Set up automatic recurring purchases that could land in the window
- Plan to sell and rebuy the same fund within the same week
- Reinvest dividends automatically in the same investment
- Trade near year-end, where settlement dates decide which year the loss lands in
The honest catches
- Automatic buys count. A dividend reinvestment or a scheduled purchase inside the window can trigger the rule.
- Partial cases exist. If you buy back only some of the shares, only part of the loss is denied. The full guide has the formula.
- Dates matter. The window runs on settlement dates, not trade dates.
This is education, not tax, legal or investment advice. Talk to a licensed Canadian chartered professional accountant or certified financial planner before you act.
Check your trades before you make them
The calculator flags trades that fall inside the 30-day window.
Open the Tax-Loss Harvesting CalculatorTest every sale against the 30-day rule
The Tax-Loss Harvesting and Superficial Loss Tracker checks each sale against the 61-day window across your accounts, your spouse's and your TFSA or RRSP, and shows the first safe day to buy back.