# Claiming Capital Losses and Capital Gains



## MrMatt (Dec 21, 2011)

Well last year I finally had a capital loss, it was bound to happen. (Mutual Fund)
This year I do have capital gains (yah!)

How do I claim the loss, I actually don't think I got a T3 or T5 for that account last year, do I have to fix something?


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## AltaRed (Jun 8, 2009)

MrMatt said:


> Well last year I finally had a capital loss, it was bound to happen. (Mutual Fund)
> This year I do have capital gains (yah!)
> 
> How do I claim the loss, I actually don't think I got a T3 or T5 for that account last year, do I have to fix something?


Other than what is shown on a T3 for the type of income received from a mutual fund, there is no capital gains or capital losses on mutual fund units until they are sold. You keep track of your Adjusted Cost Base (ACB) in your records until you sell some/all of the units and then fill out Schedule 3 of your income tax return accordingly. Your post is not clear whether you sold any capital assets, i.e units of the mutual fund.


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## MrMatt (Dec 21, 2011)

AltaRed said:


> Other than what is shown on a T3 for the type of income received from a mutual fund, there is no capital gains or capital losses on mutual fund units until they are sold. You keep track of your Adjusted Cost Base (ACB) in your records until you sell some/all of the units and then fill out Schedule 3 of your income tax return accordingly. Your post is not clear whether you sold any capital assets, i.e units of the mutual fund.


I sold them, for less than my ACB.


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## Eclectic12 (Oct 20, 2010)

MrMatt said:


> I sold them, for less than my ACB.


Okay ... this is confusing. 

You say you have a capital loss last year (i.e. 2012) and have sold them (presumably also last year). The sale should have been reported on your 2012 tax return on schedule 3 "Capital Gains (or Losses) in 2012", section 3 "Publicly traded shares, mutual fund unit .... ". 

The result of the reported transaction is column 5 "Gain (or loss)", where line 199 will report the cumulative gain or loss for all transactions reported. So if there is a net capital loss, it should already be on record with CRA.

If you didn't report the 2012 sale on schedule 3, you'll need to file an adjustment for your 2012 tax return to get the loss recorded.


Perhaps you sold the MF units in 2013 so that the loss has not been reported yet?

If so and the gain is also from a sale in 2013, schedule 3 will subtract the loss line from the gain line so that line 199 will be the net result.


I'm a little concerned that it appears you are not fully up to speed on what needs to be reported on your tax return and suggest you borrow a book from the library that has a section on investment tax report - both the year to year reporting (ex. dividends, income, capital gains) as well as the reporting for sales (ex. schedule 3, section 3 in the year the investment was either sold or deemed to be disposed [examples include buyouts of shares or transfers to registered accounts]).

Being familiar with the process helps ... not to mention will avoid the work to file an adjustment after the fact.


Cheers


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## Synergy (Mar 18, 2013)

Question about the canadian "superficial loss rule" when claiming capital losses. I couldn't find another thread discussing this.



> Superficial loss: if you sell something at a loss and then buy it right back within 30 days you are not allowed to claim the capital loss for tax purposes but you can add the cost to your Adjusted Cost Base


I just want to make sure I got this right. Lets say I reliaze a loss of $2500 on stock ABC, as long as I wait over 30 days to repurchase stock ABC I'll be able to use the capital loss towards other capital gains for that tax year?


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## Guban (Jul 5, 2011)

Synergy said:


> Question about the canadian "superficial loss rule" when claiming capital losses. I couldn't find another thread discussing this.
> 
> 
> 
> I just want to make sure I got this right. Lets say I reliaze a loss of $2500 on stock ABC, as long as I wait over 30 days to repurchase stock ABC I'll be able to use the capital loss towards other capital gains for that tax year?


Looks good, but don't forget that you couldn't have bought it 30 days before the sale too! This prevents a taxpayer from trying to harvest the loss, and still own the shares afterwards.

See:
http://www.taxtips.ca/personaltax/investing/taxtreatment/shares.htm#superficialloss


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## Eclectic12 (Oct 20, 2010)

Synergy said:


> Question about the canadian "superficial loss rule" when claiming capital losses ...
> 
> I just want to make sure I got this right.
> 
> Lets say I reliaze a loss of $2500 on stock ABC, as long as I wait over 30 days to repurchase stock ABC I'll be able to use the capital loss towards other capital gains for that tax year?





Guban said:


> Looks good, but don't forget that you couldn't have bought it 30 days before the sale too! This prevents a taxpayer from trying to harvest the loss, and still own the shares afterwards ...


+1 ... though there was a thread here on CMF (I think it was in the investing section - which may be why you didn't find it.) that pointed out the part from the link that says:



> The superficial loss is added to the adjusted cost base of the repurchased or substitute shares.
> When the repurchased or substitute shares are sold, the loss can be claimed.


This generally means that while the capital loss can't be used in the tax year the shares were sold and may mean more capital gains taxes to pay in that year (or no refund if it was carried back). In the future - this generally evens out as the selling of the repurchased shares will include the capital loss.


IMO - it's good to avoid it but if one makes a mistake, don't sweat it too much as likely over the long run, it might even out.


Cheers


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