# Capital Gains, RRSP



## NorthernRaven (Aug 4, 2010)

I'm pretty sure there's no way to beat city hall, but I thought I'd make sure I'm not missing anything obvious. If I am liquidating some mutual funds within an RRSP which have a small loss, there is no useful way of realizing a capital loss from them for tax purposes? You can't claim a loss inside an RRSP, and swapping them out for unregistered cash or securities is a deemed sale and wipes the loss from the books, and so on?


----------



## FrugalTrader (Oct 13, 2008)

My understanding is that you cannot claim capital losses from trades within a registered account.


----------



## Eclectic12 (Oct 20, 2010)

NorthernRaven said:


> I'm pretty sure there's no way to beat city hall, but I thought I'd make sure I'm not missing anything obvious. If I am liquidating some mutual funds within an RRSP which have a small loss, there is no useful way of realizing a capital loss from them for tax purposes? You can't claim a loss inside an RRSP, and swapping them out for unregistered cash or securities is a deemed sale and wipes the loss from the books, and so on?


That's part of the trade-off of RRSP. You give up the capital losses and pay the maximum tax rate (income/interest as compared to capital gains) for the right to have it grow tax free by deferring the tax until withdrawal.

A swap is not likely to help. The swap is a deemed sale for the investment or cash going into the RRSP. The mutual fund coming out is setting a new Adjusted Cost Base (ACB).

So the sale after the swap could result in a capital gain, depending on how the fund is trading after the new ACB has been set.

I'd question whether a swap is worth it as:

a) there is likely a swap fee to add to the costs.

b) to generate a loss once the swap has occurred, the fund has to keep 
dropping - which also means you are getting less money out of it.


----------

