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 you repurchase identical shares during the 30-day post-sale window but sell all of those repurchased shares before the 30-day window expires, the loss is not superficial because condition 2 is not met.
The CRA 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:
$$\text{Denied Superficial Loss} = \left( \frac{\min(S, P, B)}{S} \right) \times \text{Total Realized Capital Loss}$$
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 $$2,500.00\text{ CAD}$.
- 10 days later, you purchase 40 shares ($P = 40$).
- 15 days after that purchase (within the 30-day window), you sell 20 of those new shares.
- At the end of the 30-day post-sale period, you still hold 20 shares ($B = 20$).
Applying the CRA Formula: $$\min(S, P, B) = \min(100, 40, 20) = \mathbf{20}$$ $$\text{Denied Ratio} = \frac{20}{100} = \mathbf{20%}$$ $$\text{Denied Loss} = 20% \times $2,500.00 = \mathbf{$500.00\text{ CAD}}$$ $$\text{Allowable Capital Loss (Claimable on Schedule 3)} = $2,500.00 - $500.00 = \mathbf{$2,000.00\text{ CAD}}$$
You claim $$2,000.00\text{ CAD}$ on your current year’s Schedule 3, and the $$500.00\text{ CAD}$ denied loss is added to the ACB of the 20 remaining substituted shares ($+$25.00/\text{share}$).
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.
Under Section 54, a registered plan is an affiliated person. When identical shares are acquired inside a registered plan within the 61-day window:
- The capital loss in the taxable account is 100% denied.
- Under subsection 40(2)(g)(i), the denied loss cannot be added to the ACB of shares held in a registered account (since registered accounts do not track ACB for capital gains).
- The capital loss is permanently destroyed. You receive no current tax deduction and no future cost basis adjustment.
| 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 | Zero ACB Addition (Prohibited) | 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.
- First Safe Reacquisition Date (Day +31): The 31st calendar day following the settlement date. Purchasing identical property on or after Day 31 will not trigger the superficial loss rule.
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 evaluates a single disposition event and its corresponding 61-day window. For multi-account portfolio scanning, automated cross-brokerage 61-day detection, and rolling substituted ACB ledgers, see myCostBase. For complete year-end tax compliance, review the Canadian Adjusted Cost Base Checklist.