Canadian Stock Market Gains & Cost Basis

by Tax Guy - Burlington Accountant on February 11, 2009 Print This Post Print This Post

Stock Market Gains

Question: If I had a stock market capital gain a few years ago but due to recent stock market conditions, I have taken a capital loss in the following years. Can I apply my recent losses against previous gains?

In order to use any capital losses you must first sell or transfer the investments to an unrelated third party for the fair market value of the investment.  Normally you sell the investment and not repurchase it again for 31 days. The loss must first be used to reduce or eliminate any capital gains this year.  If there are any remaining capital gains, you may apply them back to any one of the prior three years.  You may also carry forward the capital losses indefinitely.

Cost Base of Investments

Question: What is the definition of cost of investment?

The cost of an investment is the original amount you paid for the investment, plus commission you paid, less any return of capital and less the cost base of any units or shares you sold.

About The Tax Guy...

Dean Paley CGA CFP is a Burlington accountant and financial planner who services individuals and business owners locally, nationally and internationally. Dean has appeared in the National Post, Toronto Star and Metro News.

To find out more, visit Dean's website Dean Paley CGA CFP or connect via Twitter @DeanPaleyCGACFP.

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