Capital Gains - Stocktrades Canada

In January I moved everything from my financial adviser to Questwealth, which resulted in 40k of capital gains. My thoughts at the time were to reinvest immediately and stay at the same market level, not such a brilliant plan afterall, lol. Yes my losses YTD are greater than 40k so is time to sell some of the larger losers to offset the 40k gains? My dilemma is that I would still like to keep most of these stocks, is there any issues with selling and then immediately repurchasing the same amount back? Stocks to sell and repurchase are Blackrock, BEPC, EMA, FTS, GOOGL, GSY, MG.
Thank you Teresa

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Asked on November 3, 2022 11:17 am

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Hey there Teresa.

In hindsight, obviously waiting a little after that sale would have proven to be a very good choice. You would have sold at the peak and bought back in now during a large scale bear market. However, we can't think like that. Glass half full attitude I guess is that you're even. Which, considering how bearish the markets have been, it's not a bad thing.

Around this time of year, primarily into December, a lot of investors think of selling their losers to offset some capital gains. So, you're line of thinking is not incorrect.

In terms of selling and immediately repurchasing, yes there is an issue. It's called the superficial loss rule. A superficial loss by definition:

"A superficial loss occurs when you dispose of capital property for a loss and you, or a person affiliated with you, buys or has a right to buy the same or identical property during the period starting 30 calendar days before and ending 30 calendar days after the sale."

So what this is saying, is if you do sell off those assets for capital losses, you cannot repurchase them for 30 calendar days. If you did, they would not qualify for a capital loss.

Does this make sense? Any other questions just drop them in here.

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Posted by Dan Kent

Answered on November 4, 2022 8:01 am

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