Superficial Loss Rule
The 30-day superficial loss rule: when a capital loss is denied, affiliated persons, TFSA and RRSP traps, ETFs, and the 2026 tax-loss selling deadline.
The short version
- A capital loss is denied if you, or someone affiliated with you, buy the same or identical investment within 30 days before or after the sale, and still own it 30 days after.
- That's a 61-day window: the sale day, 30 days before and 30 days after. Affiliated includes your spouse or common-law partner and corporations you control.
- In a taxable account, the denied loss isn't gone: it's added to the cost of the shares you bought back, so you get it later when you sell those.
- Buy it back in your TFSA or RRSP and the loss is denied and gone for good. This is the expensive version.
- For 2026, the last day to sell and have the loss count is about December 30, 2026, because trades settle one business day later. Check with your broker.
Superficial Loss Rule
Every December, some investors discover tax-loss selling (more on that in our investment tax guide): sell the loser, claim the loss, buy it right back, keep the investment. It's a lovely plan, and CRA wrote a rule against it decades ago. The superficial loss rule says that if you didn't really get out, you didn't really lose. It doesn't ban tax-loss selling. It just insists you actually be out of the position, or in something different, for a month.
When a Loss Is Superficial
| Situation | Superficial? |
|---|---|
| You sell XYZ at a loss on December 10 and buy XYZ back on December 20 | Yes, if you still hold it on January 9 |
| You bought more XYZ on November 25, then sell your older XYZ at a loss on December 10 | Yes. The window looks back 30 days too. |
| You sell XYZ at a loss and your spouse buys XYZ within 30 days | Yes. Your spouse is affiliated with you. |
| You sell XYZ at a loss and buy it in your TFSA, RRSP or FHSA within 30 days | Generally yes, and the loss is lost permanently |
| You sell XYZ at a loss and buy it back 31 days later | No |
| You sell a bank stock at a loss and buy a different bank's stock the same day | No. Different companies aren't identical property. |
| Your adult child or your parents buy XYZ | No. They aren't affiliated persons for this rule. |
The loss itself and how it can be used are on capital losses; the general rules for shares on stock taxes.
Did you trip the superficial loss rule?
Tell the assistant what you sold, when, and what you or your spouse bought in the 30 days around it, in which accounts. It tells you whether the loss is denied and what happens to it.
Example: Where the Denied Loss Goes
| Step | Shares | Cost (ACB) |
|---|---|---|
| Buy 100 shares at $50 (2025) | 100 | $5,000 |
| Sell 100 at $30 on December 1, 2026: loss of $2,000 | 0 | $0 |
| Buy 100 back at $31 on December 15, 2026 | 100 | $3,100 |
| Superficial loss: $2,000 denied, added to the new shares | 100 | $5,100 |
The loss isn't claimed in 2026, but the new shares now cost $5,100, so when you sell them, the gain is $2,000 smaller or the loss $2,000 bigger. Same total, later. If you buy back only 40 shares, only 40% of the loss is denied; the other 60% counts now. Our ACB calculator applies this automatically, including the partial version; how cost is tracked is on adjusted cost base.
Identical Property: ETFs and Funds
Shares of the same company are identical. Two ETFs from different providers tracking the same index might be. CRA has said it's a question of fact, and hasn't given a list. The safer swap is to an ETF that tracks a different index, such as a Canadian equity ETF on a different index or with a different weighting, held for 31 days. Mutual fund series of the same fund are generally treated as identical. Crypto works the same way: selling bitcoin at a loss and buying bitcoin back within 30 days is superficial; see crypto tax.
Tax-Loss Selling Without Tripping the Rule
- Sell by the settlement deadline. For 2026, trade by about December 30 so it settles December 31.
- Check the 30 days before for any purchases of the same thing, including dividend reinvestment (DRIP) purchases, which count.
- Don't rebuy in any account you or your spouse control, registered ones included, for 31 days.
- Swap, don't repurchase, if you want to stay invested: a similar, not identical, investment.
- Use the loss well. Net capital losses go back 3 years against gains or forward forever; see capital losses. Moving a loser into your TFSA instead of selling it gives you no loss at all; see TFSA rules and TFSA vs RRSP. What a gain would cost instead: capital gains calculator.
Selling U.S. stocks at a loss has a currency twist: the loss is computed in Canadian dollars; see U.S. stocks.
Superficial Loss Questions
What is the superficial loss rule in Canada?
A capital loss is denied if you or an affiliated person acquire the same or identical property in the period from 30 days before to 30 days after the sale, and still own it at the end of that period. The denied loss is usually added to the cost of the property bought back.
Does the superficial loss rule apply if my spouse buys the stock?
Yes. Your spouse or common-law partner is an affiliated person, so their purchase within the 61-day window makes your loss superficial.
What if I buy the shares back in my TFSA or RRSP?
The loss is generally denied, and because shares in a TFSA or RRSP have no cost base for tax, the denied loss can never be used. This is the most expensive way to trip the rule.
Are two ETFs tracking the same index identical property?
Possibly. CRA treats it as a question of fact and has not ruled them always identical or always different. Switching to an ETF that tracks a different index avoids the question.
What is the last day for tax-loss selling in 2026?
The sale must settle in 2026. With one-day settlement, a trade on about December 30, 2026 settles on December 31. Confirm the date with your broker, especially for U.S. and foreign markets.
Is there a superficial loss calculator?
Our adjusted cost base calculator applies the superficial loss rule automatically, including partial repurchases, and shows how much loss is denied and added to the cost of the shares you kept.
Sources: Income Tax Act, section 54 (definition of superficial loss) and paragraph 40(2)(g); CRA, What is a superficial loss; Raymond James, Tax loss harvesting in Canada: 2026 guide. Checked October 2026. The 2026 settlement date assumes the market is open December 31 and T+1 settlement; foreign markets can differ. The treatment of purchases in a TFSA, RRSP or FHSA reflects CRA's published views and professional commentary. Whether two funds are identical depends on the facts.
Last reviewed October 5, 2026 against CRA and Government of Canada sources. How we check our facts.