Capital losses can be a powerful tool to reduce the amount of capital gains you owe tax on. In Canada, when you sell an investment at a loss, you can use that loss to offset capital gains in the same year, previous years, or even future years. This means a bad investment outcome doesn't have to cost you as much at tax time. Capital losses follow the same inclusion rate as capital gains. In 2024 and 2025, you can offset 50% of your capital losses against your capital gains. Starting in 2026, the first $250,000 of net capital gains in a year is taxed at a 50% inclusion rate, but any gains above that are taxed at a 66.67% inclusion rate (also called a two-thirds inclusion rate). This means capital losses become more valuable for offsetting the higher-inclusion gains. The CRA treats capital losses and capital gains together when calculating your taxable income. You don't pay tax on the full loss amount, but rather on the included portion, just like gains. Offset gains in the current year: If you sold investments at a loss and a gain in the same tax year, you can match them directly.
Not in the current year, but your losses don't disappear. You can carry them back up to three years to offset previous gains, or carry them forward indefinitely to offset future gains. Only capital losses can offset capital gains under CRA rules.
If your capital losses exceed your capital gains, the net loss cannot reduce your other income (like employment or interest income). However, you can carry the unused loss back three years or forward indefinitely to offset capital gains in other years.
Yes, the superficial loss rule includes your spouse or common-law partner. If either of you buys substantially identical securities within 30 days of the other selling at a loss, the loss may be denied. It does not apply to adult children or other family members.
No, losses in registered accounts like RRSPs and TFSAs cannot be claimed for tax purposes. However, losses in non-registered (regular investment) accounts can offset capital gains from any account type.
You can carry capital losses back three years by filing an amended return, or forward indefinitely with no time limit. This makes capital losses valuable even if you don't have gains right now.