Q: Rather than selling a position and buying it back 30 days later, can you double down on a losing position and then sell half 30 days later to capture the loss? I considered options...but sounds like one cannot use options to maintain exposure and still log a capital loss.
5i Research Answer:
The calculation will be on your average cost base, so any taxable loss would include the most recent purchase being made. As long as you wait 30 days to sell and claim the loss, this can be done. However, we are not sure it achieves any goal here. Let's say you buy one share at $100 and it goes to $50 and you double down on it ACB is $75. You sell at $75 so you don’t actually now have a loss. If it goes to $25 your loss is $50 on the sold share, but you also have an embedded $50 loss on the remaining share.