Superficial Loss — the 30-day rule
⚠️ For informational purposes only. This article presents facts and concepts. WealthWise is not a registered investment advisor. For any investment decision, consult a licensed advisor with your provincial regulator.
Superficial loss is a CRA anti-avoidance rule: if you sell at a loss then repurchase the same security within 30 days, the loss is denied and added to the new lot’s ACB.
1. Precise definition
A loss is superficial if:
- You (or affiliated person: spouse, trust, controlled corp) repurchase identical security
- Within 61-day window (30 days before + sale day + 30 days after)
- You still own it at day 30 after the sale
2. Worked example
You hold 100 XEQT at $35 (ACB $3,500). Dec 15, XEQT at $30.
- Sell: 100 × 30 = $3,000. Loss: $500
- Buy back Dec 20: 100 XEQT at $30 = $3,000
- CRA: loss denied. New ACB = 3,000 + 500 = $3,500
3. Tax-loss harvesting (legal)
Sell at loss year-end to reduce gains. To allow:
- Buy similar but distinct security (sell XEQT, buy VEQT)
- Wait 31 days minimum before repurchasing same
4. Common trap: automatic DRIP
Verify no DRIP transaction falls within 30-day window. One reinvested dividend can invalidate the whole loss.
5. Spouse and affiliated parties
If spouse buys same security within 30 days, rule applies. Same for controlled corps or family trusts.
6. Documentation for CRA
Keep all statements for 6 years. When in doubt, compute adjusted ACB yourself rather than trusting your broker.
Frequently Asked Questions
Sell XEQT, buy VEQT: superficial loss?
No, distinct securities (same family but different ISIN). Loss allowed.
Does superficial loss apply to TFSA?
No. TFSA being tax-free, gains and losses are not reportable.
Minimum days before repurchase?
At least 31 days after sale (or before if prior purchase).
What happens to denied loss?
Added to ACB of repurchase. You recover the loss later when definitively selling.