Selling the Loser Is the Easy Part

Capital Losses

The Rule That Undoes It
If You Buy Back Too Soon

Tax-loss selling explains itself in a sentence. Sell something in a taxable account for less than you paid, and the capital loss can be set against capital gains. Most people have heard that much and stopped there.

What far fewer have heard is the rule that quietly cancels it. The superficial loss rule denies the loss when the same property comes back too quickly — and "too quickly" is a wider window, across more accounts, than almost anyone assumes.

This is not a reason to avoid selling at a loss. It is a reason to know the shape of the window before you place the trade rather than after, because every version of this mistake is unwinnable once it has happened.

The Mechanic

Thirty Days, Both Directions

The window runs thirty days before the sale and thirty days after it, with the day of the sale in between. If identical property is acquired anywhere inside that window, and it is still held when the window closes, the loss is denied. Our capital gains calculator works the denied amount out in proportion to what was bought back, and shows where it goes.

Two things about that catch people. The first is that it reaches backwards as well as forwards — a position you topped up three weeks before deciding to sell is already inside the window, and nothing you do afterwards changes that. The second is the still-held test at the end: buying back and selling again before the window closes is a different fact pattern from buying back and keeping it.

A denied loss is not always a destroyed one. In the ordinary case it is added to the cost base of the property you repurchased, so it comes back to you whenever you eventually sell that position for good. That is a deferral rather than a loss of the deduction — but it is not the deduction you were planning to claim this year, which is usually the entire reason for the exercise.

The Part Nobody Expects

It Is Not Just Your Account

The rule does not only look at the account you sold from. It looks at you and at anyone affiliated with you, and that list is wider than most people picture. A repurchase by your spouse or common-law partner counts. So does one inside your RRSP, inside your TFSA, or by a corporation you control.

Selling at a loss in a non-registered account and rebuying the same holding in your TFSA the following week is the textbook version, and it is common precisely because it feels like moving money between your own pockets.

The registered-account version is the one to be careful about, because it is the case where the loss does not come back. The denied loss normally attaches to the cost base of the repurchased property — but there is no taxable cost base inside an RRSP or TFSA for it to attach to. It is not deferred to a later year. It is gone.

Automatic activity is the usual culprit rather than a deliberate trade. A dividend reinvestment plan, a scheduled monthly contribution, or a rebalance inside a managed account can all acquire the identical property inside the window without anyone making a decision that felt like buying.

Digital Assets

Crypto: Same Rule,
Much Harder Question

The rules reach crypto unchanged. One unit of a token is identical property to another unit of the same token, so selling at a loss and rebuying inside the window hits the same wall it would with a stock. What changes is not the law. It is whether you can answer the question the law asks.

Identical property means the same token wherever it sits. The same coin on a Canadian exchange, on a foreign one, and in a hardware wallet is one holding, not three positions. So the window does not run per account — it runs across every venue you use, at once.

That is what makes "did I buy it back" genuinely hard. With one brokerage you read one statement. With crypto, an acquisition inside the window might be a recurring buy on an exchange you stopped thinking about, a staking reward paid in the same token, or a position unwinding back into it. Each is an acquisition of identical property, and any one of them lands in the window.

Two questions here do not have clean answers, and are worth raising rather than guessing at: whether a wrapped or staked derivative of a token is identical to the token itself, and how moving in and out through a stablecoin reads on review. Both belong in a conversation, not a spreadsheet formula.

One threshold matters more than any of it. If your trading is frequent and business-like enough to be business income rather than capital gains, none of this applies in the same form, because the losses are not capital losses at all. Where that line falls is part of our crypto and digital asset work.