# Does net loss sale, then getting DRIP shares run afoul of the superficial loss rule?



## Cents (Apr 3, 2011)

I sold all units of CIBC at a loss but then received $720 quarterly dividend within a month from sale in a non-registered account that was set up to DRIP. The DRIP resulted in 9 shares being acquired. Does this cause my net loss sale to run afoul of the superficial loss rule. Or does this loss sale only run afoul if the DRIPPED shares are held for more than 30 days? (ie Should I have sold the dripped shares as soon as I received them from the DRIP?) or does the time the DRIPPED shares are held matter?

Any advice would be appreciated.
Thx.


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## Eclectic12 (Oct 20, 2010)

I'm not sure whether CRA would stick to the letter of the law and disallow it or let it slide. I'd recommend giving them a call.

Either way, unless you need the capital loss in the year it was sold, my understanding is the superficial loss is added to the ACB so that you still get the benefit. The difference is that benefit will become available in the future, when another sale is made. 

Or another way of thinking about it - the superficial loss is only delaying the claim of the loss to the future (i.e. there is a delay and less flexibility).

http://www.taxtips.ca/personaltax/investing/taxtreatment/shares.htm
http://wheredoesallmymoneygo.com/superficial-loss-rules-in-canada/


Cheers


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