The calculator above determines whether your capital loss is denied under Canada’s 30-day superficial loss rule, computes exact partial loss denials using the CRA’s administrative formula, and calculates the upward Adjusted Cost Base (ACB) addition for substituted shares.
In Canadian tax law (subsections 40(2)(g)(i) and 54 of the Income Tax Act), a capital loss realized on the sale of a security is deemed superficial (and disallowed for tax purposes) if two distinct conditions are both met:
- The 61-Day Acquisition Condition: You or an affiliated person acquired an identical property (or a right to acquire one) during the 61-day window starting 30 calendar days before the settlement date, the settlement date itself, and ending 30 calendar days after the settlement date.
- The 30-Day Ownership Condition: At the end of that 61-day period (30 calendar days after the settlement date), you or an affiliated person still own or have a right to acquire the identical property.
If neither you nor an affiliated person owns or has a right to acquire any identical property at the end of the period, the ownership condition is not met. Selling only your own replacement shares is not enough if relevant holdings remain elsewhere.
Partial superficial loss formula: min(S, P, B)
A common misconception is that repurchasing any shares denies 100% of your capital loss, or that repurchasing 40 shares out of a 100-share sale automatically denies 40% of the loss.
The Canada Revenue Agency administratively applies a precise three-variable formula to compute partial superficial loss denials:
Denied superficial loss = [min(S, P, B) ÷ S] × total realized capital loss
Here, min(S, P, B) means the smallest of the three share counts.
Where:
- S (Shares Disposed): The number of shares sold at a loss.
- P (Shares Acquired in Period): The total number of identical shares acquired by you or an affiliated person during the 61-day period.
- B (Balance Remaining): The number of identical shares still held by you or an affiliated person at the end of the period (30 calendar days after the sale).
Worked Example: Partial Superficial Loss Calculation
Suppose you sell 100 shares of a stock in your non-registered account at a total loss of $2,500.00 CAD.
- 10 days later, you purchase 40 shares (P = 40).
- 15 days after that purchase (within the 30-day window), you sell 20 of those new shares.
- At the end of the 30-day post-sale period, you still hold 20 shares (B = 20).
Applying the CRA Formula:
- Shares subject to denial: min(100, 40, 20) = 20
- Denied proportion: 20 ÷ 100 = 20%
- Denied loss: 20% × $2,500.00 = $500.00 CAD
- Capital loss remaining before the inclusion rate: $2,500.00 − $500.00 = $2,000.00 CAD
Before applying the inclusion rate and any other restrictions, the remaining capital loss is $2,000.00 CAD, and the $500.00 CAD denied loss is added to the ACB of the 20 remaining substituted shares (+$25.00 per share).
The Dangerous TFSA & RRSP Superficial Loss Trap
One of the most expensive traps in Canadian personal investing occurs when an investor sells a losing stock in a taxable account and immediately repurchases it inside a registered account (TFSA, RRSP, FHSA, or RESP) to “buy the dip” tax-free.
When a relevant registered-plan acquisition and the end-of-period ownership condition make a loss superficial, the denied portion is generally effectively permanent: an ACB addition inside the plan provides no useful taxable capital-gains benefit. A partial reacquisition can produce a partial denial; it is not automatically a 100% denial. Confirm affiliation and account-specific facts using the complete superficial loss guide .
| Account Where Repurchase Occurs | Loss Treatment | ACB Adjustment to Substituted Shares | Long-Term Tax Effect |
|---|---|---|---|
| Taxable (Non-Registered) Account | Denied under 30-day rule | Full Denied Loss added to ACB | Deferred: Lower capital gains / larger losses when sold in future. |
| Registered Account (TFSA / RRSP / FHSA) | Denied under 30-day rule | No useful taxable ACB benefit | Permanent Loss: Capital loss is permanently destroyed with zero tax benefit. |
| Spouse / Common-Law Partner’s Account | Denied under 30-day rule | Added to Spouse’s Taxable ACB | Transferred: Capital loss deferred into spouse’s future cost basis. |
Settlement Date vs. Trade Date for 30-Day Calculations
The Canada Revenue Agency has confirmed in technical interpretations (such as 2012-0468931C6 and 2015-0588981C6) and in Form T5008 guidelines that the disposition of exchange-traded securities occurs on the settlement date (typically 1 business day after the trade date under T+1 rules).
- Day 0: The settlement date of your loss disposition.
- Window Start (Day -30): 30 calendar days before the settlement date.
- Window End (Day +30): 30 calendar days after the settlement date.
- Outside the window (Day +31): An acquisition settling on the 31st calendar day after the disposition is outside that sale’s window. This does not eliminate a superficial loss caused by earlier acquisitions and continuing ownership.
Who Is an “Affiliated Person” Under CRA Rules?
Under Section 251.1 of the Income Tax Act, the superficial loss rule applies to acquisitions made by any of the following affiliated persons:
- You (across any of your taxable or registered brokerage accounts).
- Your spouse or common-law partner.
- A corporation controlled by you or your spouse.
- A trust in which you or your spouse are a majority-interest beneficiary (including your RRSP, RRIF, TFSA, FHSA, or RESP).
Note: Children, parents, siblings, and other family members are not affiliated persons under Section 251.1.
Scope note: This calculator illustrates a single disposition and its 61-day window using the information entered. Verify affiliation, end-of-period ownership, and overlapping dispositions separately. If the loss is allowed, the tax-loss harvesting and T1A carryback calculator estimates its value against current and prior-year gains. For recordkeeping and supported manual adjustments, see how myCostBase calculates ACB . For complete year-end tax compliance, review the Canadian Adjusted Cost Base Checklist .
Frequently asked questions: Superficial Loss Calculator Canada
What is the superficial loss rule in Canada?
The superficial loss rule (subsections 40(2)(g)(i) and 54 of the Income Tax Act) denies a capital loss when you or an affiliated person acquire an identical property during a 61-day period (starting 30 days before the sale and ending 30 days after the settlement date) and still own or have a right to acquire that property at the end of the 30-day post-settlement period.
How does the CRA calculate a partial superficial loss?
When you sell a block of shares and repurchase only a portion of them during the 61-day window, the CRA applies the formula: Denied Loss = (min(S, P, B) / S) * Total Loss, where S is shares sold, P is identical shares acquired during the 61-day window, and B is the number of shares still held at the end of the 30-day post-disposition period. The remaining loss is subject to the normal capital-loss reporting and inclusion-rate rules.
What happens if I repurchase identical shares inside a TFSA or RRSP?
If a relevant acquisition in a registered plan and the end-of-period ownership condition make the loss superficial, the denied portion generally provides no future taxable ACB benefit. The denial may be partial or full, depending on the share counts and applicable facts.
Does the 30-day window start on the trade date or settlement date?
Under CRA technical interpretations and Form T5008 instructions, exchange-traded securities are considered disposed of on their settlement date. The 61-day window spans 30 calendar days before the settlement date, the settlement date itself, and 30 calendar days after the settlement date. An acquisition settling on Day 31 is outside that sale’s window, but acquisitions earlier in the window and affiliated-person holdings still need review.
What happens to the denied loss in a taxable account?
When the repurchase occurs in a non-registered (taxable) account, the denied capital loss is added directly to the Adjusted Cost Base (ACB) of the repurchased substituted shares. This increases your future cost basis, effectively deferring the tax deduction until the substituted shares are sold.