In Canada, Investing, Money

Investing Series: How Capital Gains and Losses are treated in Canada

This is a part of the Investing Series.

————————————————-

Before the end of the year (December 31st) if you divest (meaning “sell”) off your stocks that have lost money in capital, you can use those losses to offset any capital gains you may have made during the year.

stock-photo-money-cash-bills-rolled-canada

In Canada:

Capital gains are only taxed on the 50% as of 2014.

If you made $1000, you are only taxed on $500 at your current individual tax rate.

Capital losses can only claimed on the 50% of its value to lowers your taxes as of 2014.

They are also used to lower your taxable income and you can either use in that tax year or carry forward.

If you lost $1000, you can only claim $500 in losses on your taxes.


This is why a lot of investors near the end of a calendar year tend to sell off any losers in their portfolio so that they can divest of the stock, and get that 50% capital loss to apply to their individual taxes.

Capital losses (the credits) can be carried forward indefinitely. If there are still capital losses in the year of that person’s death, you can use the credits against ALL types of income (not just certain ones).

That’s it.

For more details especially on capital gains or losses on properties, go to the CRA site.

Share Tweet Pin It +1

Sherry of Save. Spend. Splurge.

Am my own Sugar Daddy. Am a millionaire at 36 after getting out of $60K of student debt in 18 months, a little over a decade earlier, using TheBudgetingTool.com. I have worked 50% of my career (taking 1-2 year breaks), and quadrupled my income within 2 years of graduating, going from $65K to $260K with an average lifetime savings rate of 50%. I have 11 side incomes that are on track in 2020 to make me $50K - $75K. I could retire today if I wanted, but love my work-life balance as a freelancing consultant in STEM (Science, Technology, Engineering, Math). I am all about balance - between time and money, and also enjoying my money. I also post daily on Instagram @saverspender.

You may also like

Previous PostDo you have a fear of returning things?
Next PostIn the world of Save. Spend. Splurge.

2 Comments

  1. Dan @ Our Big Fat Wallet

    Good stuff. One trick to watch out for is superficial losses, where you basically sell an investment to claim the tax loss and then buy it back within 30 days. In order to claim the loss for tax purposes you need to not buy it back within 30 days

    Reply

Leave a Reply

In a nutshell…

Save. Spend. Splurge.
[ wealth. style. minimalism. ]

——

MOST DEBT: cleared $60K in 18 months

MONEY: Hit $1M personal net worth At 36

NEW GOAL: $1M in invested assets

FAVOURITE DAY: payday

HATES: being late & lazy people

SOCIAL: Instagram @saverspender

DRINKS: homemade matcha lattes

SLEEPS: on a 100% cotton U.S.-made futon

WRITES: Books (also available on Amazon).

BEAUTY: swears by Paula’s Choice

——

…but you can read more about me , browse my index of posts, or get in touch with me, talk to me directly on Instagram, and of course, ask me anything here.

$35 The Wealth Building Tool

Like a Boss Library (Sherry’s Books)

Referral Codes

Free Money Surveys
[ Use this link ]



Webhosting
[ saverspender ]



Shopping Cashback
[ Use this link ]



Clothing Resale


[ SHERRYISH ]



Private Lending
[ 7b03f0 ]



No-Fee Banking
[ 32726976S1 ]



Discount Brokerage
[ o0soehds ]



Social media scheduler
[ saverspender ]



Blog Ad Network
[ Use this link ]



Disclosure

Save. Spend. Splurge. uses affiliate links from Shopstyle, and Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com or ShopStyle. In addition to these, any referrals on the page will result in revenue if used such as BlueHost.

In English: If you click on a link, I could get a small commission, typically a few cents. And if you use a referral code, I could get anywhere from $10 – $70 for it. Thank you for your kind support!

Also, I am not a professional investment advisor or money manager by any means.

I am just a woman who loves money, talking about money, and making money.

All opinions expressed on this blog are personal and for entertainment value. Take them with a grain of salt and always consult a professional when in doubt.