# Capital loss from Covered call ETF cannot be claimed?



## metta2006 (May 1, 2011)

Hi,
I tried to claim capital loss from BMO Covered CALL Canadian Banks ETF (ZWB) using the tool on adjustedcostbase.ca. When I entered all the info, it says, it might not qualify for capital loss as it seems to have involved short selling. Even though I wasn't directly involved in short selling, will I not be able to harvest capital loss from this type of ETF? The amount is $600 so I wonder if it is worth the effort to look further into it. It says I need to seek a tax professional. Thanks so much in advance!


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## Eclectic12 (Oct 20, 2010)

When you say you tried to claim the cl, have you sold some or all of the ETF units?

I'd think that if your thinking is that the ETF did the short selling so that you are not directly involved & can claim the cl, that also would mean you'd have to sell units.


Cheers


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## metta2006 (May 1, 2011)

I sold all of the ETF units with loss. So are you saying that I can still try to offset capital gains from this capital loss even though ETF was involved in short selling? Thank you.


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## andrewf (Mar 1, 2010)

Maybe it's the way you set up your transactions. Did you, at any point, have a negative # of units according to acb.ca?


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## Eclectic12 (Oct 20, 2010)

metta2006 said:


> I sold all of the ETF units with loss. So are you saying that I can still try to offset capital gains from this capital loss even though ETF was involved in short selling? Thank you.


I don't know of any reason why not - though I've never dabbled in such an ETF and haven't spent any time researching it.


Cheers


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## caricole (Mar 12, 2012)

*



It says I need to seek a tax professional

Click to expand...

* :bull_head::jaded:

*Thats a good-one...

1) You sold a covered call, it expires or is exercised...your cost base is zero, so capital gain

2) You bought your ETF and sold it...the difference between is capital gain or capital loss

3) The end result is the total of the 2 operations....capital gain or capital loss

Thats the way I do it for ages and had never any problem...for covered calls on stocks or ETF's

To me, your TOOL on adjusted cost base is off track*


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## andrewf (Mar 1, 2010)

OP did not execute a covered call. They bought and sold an ETF, which just so happens to follow a covered call strategy.


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