Personal Investor: How tax-loss selling can work with RRSPs, TFSAs

We hear a lot about tax-loss selling at this time of the year. But for the bulk of Canadians who invest in their registered retirement savings plans and tax-free saving accounts, the tax-saving tool does not apply. It’s a blessing in disguise because tax-loss selling is a way to recuperate capital gains taxes – and the capital gains tax is not applied to RRSPs and TFSAs. For investors with equities outside RRSPs and TFSAs, and contribution space to spare, there is a way to take advantage of both tax breaks. First, it’s important to know how tax-loss selling works. Any capital loss incurred during 2016 in a non-registered account can be applied against capital gains in a non-registered account going back three years or forward indefinitely. In other words, if you have a money-losing stock, the loss can help wipe out taxes you paid on other stocks that gained.
For more information contact Andrew.pereira@investorsgroup.com