# Capital Gains Question re: stock sold



## eulogy (Oct 29, 2011)

I have an ETF in my taxable account that I want to sell and rebuy the same index in a registered account. I've been told that you have to wait 30 days to rebuy the same type of ETF (say like indexes the S&P500). But what exactly is the reason for this and is it necessary? I'm going to pay the capital gains no matter what right?


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## FrugalTrader (Oct 13, 2008)

If you have a capital gain, you can re-buy right away without any consequences. It's when you have a capital loss (which can be claimed) that you have to wait a period of time before buying.


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## eulogy (Oct 29, 2011)

Ahh, that makes perfect sense. Thanks for that.

Now to figure out how I can sell and buy at the same time (so I'm not out of the market) without it costing me.


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## FrugalTrader (Oct 13, 2008)

You could call your broker and transfer the position in kind. You will still incur capital gains, but you will avoid trading fees and time out of the market.


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## eulogy (Oct 29, 2011)

FrugalTrader said:


> You could call your broker and transfer the position in kind. You will still incur capital gains, but you will avoid trading fees and time out of the market.


Another good idea. I was going to call them up and just ask how I could do it. I assume they'd tell me what you have told me. I'm still going to sell it, but it'll be easier to sell it in the registered account and just buy a cheaper ETF.


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## eulogy (Oct 29, 2011)

Thanks for the help FrugalTrader. Waterhouse moved them over the exact number of units I needed after close yesterday. In fact, they let me choose whether I wanted to move at last price, high or low for the day.


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## Eclectic12 (Oct 20, 2010)

eulogy said:


> I have an ETF in my taxable account that I want to sell and rebuy the same index in a registered account.
> I've been told that you have to wait 30 days to rebuy the same type of ETF (say like indexes the S&P500).


I'm not sure this is completely accurate. What I've heard of is avoiding the superficial loss rules that say one can't sell at a loss in a taxable account and re-buy *the same investment* in a registered account.

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


So selling TD bank shares at a capital loss, claiming the CL on one's tax return against other capital gains and re-buying the TD bank shares in one's RRSP would not be allowed.

However, I've seen written that one could sell the TD bank shares for a CL, claim the CL and buying BMO bank shares is okay. I'd expect that selling BlackRock's S&P500 index and then rebuying Vanguard's S&P500 index would be fine.

Unless there's be a tax ruling or advice that I've missed?




eulogy said:


> But what exactly is the reason for this and is it necessary?
> I'm going to pay the capital gains no matter what right?


Not necessarily ... you could sell Suncor shares for a CL of $500, sell Emera shares for a CG of $500 and re-buy the Suncor shares in your RRSP. The CL = CG so for the price of the commissions, you'd have avoided paying capital gains taxes while maintaining the same control of the Suncor shares.

Or perhaps a better example is where one re-buys the Suncor shares in the TFSA, making future gains tax free.


CRA is trying to make sure the income tax situation isn't being manipulated with short term moves.



Cheers


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