December 2018 – Consider whether tax loss selling makes sense this year (selling investments with accrued losses at year end to offset capital gains realized elsewhere in your portfolio). December 27th is the last day to settle trades by December 31st. Net capital losses that can’t be used this year, can be carried back 3 years or carried forward indefinitely to offset net capital gains in other years. Don’t forget that if you sell U.S. or other foreign securities, foreign exchange needs to be considered. With the big currency swings we’ve experienced, what looks like a gain could actually turn out to be a loss. Lastly, remember that if you repurchase a security sold at a loss within 30 days, you will be subject to the superficial loss rule. This means your capital loss will be denied and added to the adjusted cost base (tax cost) of the repurchased security so that any benefit of the capital loss will only be obtained when the repurchased security is finally sold. Be sure to talk to your tax advisor before taking action.
Tax Loss Selling
by Heidi Pullem | Dec 20, 2018 | Tips