I do not understand the 60/61 days restriction for superficial loss on a stock sale.
I understand the ‘Do not rebuy’ before 30/31 days AFTER the sale. But what does the 30 days period PRIOR to a sale have to do with it? If I added to a losing position 2 weeks ago, and increased my loss, (thanks LMN!), can I sale now and rebuy in 31 days? Cash account only, no ‘affiliated’ person. Many thanks
Think of this scenario: An investor owns 1000 shares and wants to take a loss but also wants to maintain their ownership. So they buy 1,000 shares, then sell 1,000 shares right away. Their net position has not changed, so the CRA deems that no real loss has occurred. The prior period rule is also there to prevent a scenario (among others) where someone could purchase a stock in another account and then selling the stock at a loss at a different account. This means they 'get' the tax loss but the actual ownership hasnt changed, because they still hold it in another account. In the question example, one can still sell the 'original' holding for a loss but not the additional. A full sale can occur but no loss can be claimed on the full amount.