RE:RE:RE:RE:RE:RE:RE:Superficial lossLattice - I was just repeating what the senior advisor at CRA told me (Chris). Unlike you, I don't make s**t up. There is a reason you are in exile and you should just stay there for everyone's benefit as you have yet to provide anything of worth recently on this board besides your snidey little condescending comments.
He (Chris) confirmed with me on several occasions that if you had stock in company A, then sold only some of the shares at a loss, then you were not able to report this as a capital loss until you sold all of your stock. To report this as a capital loss, you needed to sell ALL of your stock in company A. I have not yet put this by my accountant for verification as I don't file my year-end but keep my books in order throughout the year. I had a full CRA tax audit two years ago for the business which lastest about 4 months and nothing came of it - a total waste of time for all parties involved to be honest.
Sharing my findings I thought would be of some use to the board. It wouldn't be the first time I have received incorrect information from a CRA agent so instead of calling my post "rubbish", how about you do a little research yourself and get back to me?
LatticelnExile wrote: Then when Kupinksy sold 500,000 shares of CXR in December 30 2015 and said it was for a capital loss, he should have sold
ALL of his CXR stock? Tommy, this is completely rubbish that you have to sell ALL of your stock... and I wish you the best of luck in reporting all of your capital losses this year !!
TickerTwit wrote: This piece I did not know:
"To report capital loss, you must sell ALL of your stock" Thanks for the going to the trouble!
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TOMMY1 wrote: TT - Just been talking to CRA for a good part of 30 minutes as they were not so familiar with the IT-459 if you can believe it. I was referred to a more senior agent who did a good job of explaining it as well as eligibility.
Basically, the IT-459 only applies to those who report their income on business basis so the capital gains / losses rules do not apply.
If you report your income based on a capital basis, then the superficial loss rules do apply. If you sell a stock at a loss, in order to claim this as a capital loss, you must not rebuy the stock within 30 days. To report capital loss, you must sell ALL of your stock and must not rebuy within 30 days. This rule apples to INVESTORS (passive income) and not DAY TRADERS (main income).
Before you proceed you have to ask yourself whether you are taxed on basis of capital or income.
Day trader = business income (so IT-459 applies)
Investor = capital gains / losses rules apply (so superficial losses need to be considered)
As I am an investor (not a day trader), and this is not my main source of income, then the superficial losses apply to me as I declare income from my investments as capital losses / gains (and so need to be aware of superficial losses).
Appreciate you drawing this to my attention and I hope the above helps some others on this board as some may also need to be aware of superficial losses as not all fall into the category of 'day traders".
TickerTwit wrote: IT-459 is old (1980) but seems to be the most informative document the CRA offers at the moment. Some accounting firms publish additional info, such as case law examples where investors have challenged the CRA after being declared 'traders' (or conversely, wanting to be 'traders', but being declared 'investors'). Good that you have an accountant for a qualified opinion.
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TOMMY1 wrote: Thanks TT - good to know and I will have to put this by my accountant to see if my trades are eligible. I found some archived information on the CRA website but nothing current:
https://www.cra-arc.gc.ca/E/pub/tp/it459/it459-e.html Thanks again!
TickerTwit wrote: This applies to capital gains only. If you are engaged in an "Adventure or Concern in the Nature of Trade" (as the CRA defines it), the superficial loss does not apply.
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TOMMY1 wrote: Be careful when selling to offset capital gains as the losses will not be recognised by CRA as capital losses if you have bought or sold within 30 days (before or after the sale date). These kind of losses are seen as "superficial loss".