# Can I sell stocks to take profit for a year and repurchase same stocks immediately?



## xxgrzesx (May 25, 2010)

I want to sell stocks and take profits for tax year 2012. I want to repurchase them immediately or withing few days after sale. Can I do it without any consequences? I will not be selling any stocks that have losses, only profits. I expect higher income in 2013, so I want to take profit while in lower tax bracket. All stocks are listed on Toronto Stock Exchange if that matters. I am in Ontario. Thank you.


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## P_I (Dec 2, 2011)

Other than triggering taxable capital gains, there are no other consequences. The only tax rules about selling and then re-purchasing apply when a capital loss is involved, and then you need to wait 30 days to re-purchase to avoid the superficial loss rules. See the CRA's What is a superficial loss? and a simplified version, Superficial loss - finiki, the Canadian financial Wiki.


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## kcowan (Jul 1, 2010)

If the amount is large, make sure to pay an instalment on your taxes in December. The interest on unpaid taxes must remain below $1000 to avoid penalties.
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/pymnts/nstlmnts/ntrst-eng.html?=slnk


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## Eclectic12 (Oct 20, 2010)

kcowan said:


> If the amount is large, make sure to pay an instalment on your taxes in December. The interest on unpaid taxes must remain below $1000 to avoid penalties...


Hmmm ... unless CRA has already asked one to pay taxes by installments, the capital gains tax that is not offset by other capital losses will be due April 30th, 2013, will it not?

... or am I missing something?


Cheers


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## kcowan (Jul 1, 2010)

Eclectic12 said:


> Hmmm ... unless CRA has already asked one to pay taxes by installments, the capital gains tax that is not offset by other capital losses will be due April 30th, 2013, will it not?


As you can see from the attached link to the CRA, the answer is "it depends". But if you follow their logic, then you would be OK. But I am just making the point to check whether OP is onside with the CRA.

(My taxes tend to be lumpy because I live off CGs so paying by instalments is not always the best option.)


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## Eclectic12 (Oct 20, 2010)

kcowan said:


> As you can see from the attached link to the CRA, the answer is "it depends". But if you follow their logic, then you would be OK. But I am just making the point to check whether OP is onside with the CRA.
> 
> (My taxes tend to be lumpy because I live off CGs so paying by instalments is not always the best option.)



Cool ... though it's the "it depends" part that worries me ... :biggrin:

There's so much around taxes that are simple when the amounts are small or one hasn't got a lot of variety. 


Cheers


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## Rusty O'Toole (Feb 1, 2012)

You can also buy a call option, sell your stock, and buy it back 30 days later at today's price (thanks to the call). Or, if you need to hold for a certain period for a capital gain, protect yourself by buying a put option which guarantees you today's price.


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