Repurchase of Identical Security – Superficial Loss Rules

by Tax Guy - Burlington Accountant on November 27, 2008 Print This Post Print This Post

Question: “Can you please tell me how many days between the repurchase of an identical security must pass before I can claim the capital loss?”

If you dispose of investments and 30 days before or after the disposition, you, your spouse or an affiliated person, such as a corporation controlled by you and/or your spouse, purchase identical properties which continue to be held 30 days after the disposition, your capital losses will be denied.  The amount of the denied loss is added to the cost base of the identical properties purchased, so the loss will be taken into account and become deductible when the identical properties are ultimately disposed of.

It does not matter what type of security is purchased nor the market.  It only matters that the property is capita property.

Be aware that if you intend to transfer securities “in kind” to an RRSP, then the loss will be denied and lost.  Also note that a sale of a security outside of an RRSP and a subsequent repurchase of the same security inside an RRSP will also result in a denial of the loss.

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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Edward March 4, 2010 at 3:55 pm

I would appreciate if somebody could clarify how the supeficial rule works when refered to calendar year.

Let say on the 1 Oct. 09 I bought 1 share of X company for $1000. I sold this share on 20 dec. 09 for $500 (loss -$500) and the settlment date is 27 Dec. 09. Do I understand it properly – in order to claim capital loss for 2009, I can not buy the same shares of the same company until 27 Jan. 2010?


Tax Guy March 5, 2010 at 12:14 pm

@Edward: You are correct. You can’t re-purchase until 30 days later (not it the re-purchase can’t settle before the 30 days are up).

Bern September 1, 2010 at 5:03 am

One more clarification. What would happen if you bought 100 shares of XYZ for $1000 on October 1, 09 and without buying anymore, sold all 100 shares on October 25, 09 , 24 days later for $900 and never bought anymore that year. Would you have a $100 capital loss or is this considered a Superficial Loss?

Thanks Bern

Tax Guy September 1, 2010 at 10:51 am

It would not be a superficial loss.

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