RE:Tax Selling: Tax-loss harvesting (or tax-loss selling) is a tax strategy by which you intentionally sell an investment for a loss in order to offset capital gains taxes elsewhere. It might sound complicated, but it’s actually fairly easy to do, and it could help you lower your tax bill over the long run.
How does tax-loss harvesting work, and how can you use it to your benefit? Let’s break it down.
What is tax loss harvesting?
When you sell an investment, whether it’s a stock or an ETF, below the original purchase price, you trigger a capital loss. In Canada, you can apply capital losses against capital gains, helping you lower or nullify completely taxes owed on investment earnings. If you do this strategically, meaning you deliberately sell a losing investment for the capital loss, it’s called tax loss harvesting.
No where in the "investment" category does it stipulate 30 days before the sale date.. seeing as how we're on a stock BB that was the question to begin with.. how simple can I make this.. its not that difficult to understand "property" and "investments" which is what VMD is don't have the same criteria aside from "30 days" after the sale you can't repurchase the equity as still claim the loss"..!!!!
From the CRA website:
What is a superficial loss?
A superficial loss can occur when you dispose of capital property for a loss and both of the following conditions are met:
- You, or a person affiliated with you, buys, or has a right to buy, the same or identical property (called "substituted property") during the period starting 30 calendar days before the sale and ending 30 calendar days after the sale
- You, or a person affiliated with you, still owns, or has a right to buy, the substituted property 30 calendar days after the sale
Some examples of affiliated persons are:
- you and your spouse or common-law partner
- you and a corporation that is controlled by you or your spouse or common-law partner
- a partnership and a majority-interest partner of the partnership
- a trust and its majority interest beneficiary (generally, a beneficiary who enjoys a majority of the trust income or capital) or one who is affiliated with such a beneficiary
If you have a superficial loss in 2022, you cannot deduct it when you calculate your income for the year. However, if you are the person who acquires the substituted property, you can usually add the amount of the superficial loss to the adjusted cost base of the substituted property. This will either decrease your capital gain or increase your capital loss when you sell the substituted property.
LongTerm3 wrote:
Wash-sale rules prohibit investors from
selling a security at a loss, buying the
same security again, and then realizing
those tax losses through a reduction
in capital gains taxes. The wash-sale period
occurs within 30 days of the transaction—30 days prior to
the sale and 30 days after. Wash-sale rules prohibit
investors from selling a security at a loss, buying the same
security again, and then realizing those tax losses through
a reduction in capital gains taxes.