Superficial Loss - Clarification

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Mouly
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Superficial Loss - Clarification

Post by Mouly »

About superficial losses:

I understand the rule about purchases plus or minus 30 days after a sale and how it applies to not only the seller but also people not at arms length. But I just want to clarify one thing: The other non arms length people, they can still hold the same capital property that was sold at a loss and the seller can still claim the loss?

To be clearer with an example: My wife and I both hold stock XXX. She sells at a loss and I hold on to my shares. I believe she can claim the loss while I still hold the shares as long as I don't buy within plus or minus thirty days. Is that the right understanding? Seems right to me as it is similar to myself partially selling a holding at a loss and claiming the loss.

Secondary question: If the stock XXX was also in another account under a DRIP, then do I need to turn off the DRIP to ensure no share purchases in the plus minus thirty day window?
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DavidR
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Re: Superficial Loss - Clarification

Post by DavidR »

Mouly wrote: 18 Nov 2017 11:06 To be clearer with an example: My wife and I both hold stock XXX. She sells at a loss and I hold on to my shares. I believe she can claim the loss while I still hold the shares as long as I don't buy within plus or minus thirty days. Is that the right understanding? Seems right to me as it is similar to myself partially selling a holding at a loss and claiming the loss.
You are correct. You don't have to have sold all your shares or everybody's shares to claim a loss - just make sure there haven't been purchases with the 30 days..
Mouly wrote: 18 Nov 2017 11:06 Secondary question: If the stock XXX was also in another account under a DRIP, then do I need to turn off the DRIP to ensure no share purchases in the plus minus thirty day window?
Technically yes. But if 1 share was bought by a DRIP and 100 were sold, it would not invalidate the entire loss. (there are rules to 'pro-rate' etc.)
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