Capital gains with fewer pains

Tax-loss selling before year-end could reduce your tax bill.

Gail Bebee 31 October, 2014 | 12:00PM
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The Canada Revenue Agency is not known for giving taxpayers a break. The tax treatment of failed investments is a welcome exception. If an investor loses money when she sells capital property such as a stock, bond, exchange-traded or mutual fund or real estate, she can subtract the losses from her capital gains before calculating the tax owed.

There are numerous rules to follow in order to benefit from this tax break. Prudent recordkeeping and careful planning well in advance of the calendar year-end are crucial for optimizing your tax savings.

The first thing to note is that this tax treatment applies only to capital losses in non-registered accounts. If you have losing investments in your RRSP or tax-free saving account (TFSA), consider revamping your portfolio to hold riskier investments in a non-registered account, so you can take advantage of this tax break in the future.

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About Author

Gail Bebee

Gail Bebee  Gail Bebee is an independent personal finance speaker, teacher and the author of No Hype--The Straight Goods on Investing Your Money. She can be reached at gbebee@gailbebee.com; her website is www.gailbebee.com.

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