Personal Finance

Tax Question = Stock Sale (Capital Gain)

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  • Dec 15th, 2013 12:06 am
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Tax Question = Stock Sale (Capital Gain)

I own a blue chip stock for a couple of months now (USD). If I sell now and realize the Capital gain, can I purchase the stock within an hour of the sale or do I have to wait the 30 day period.

I was always under the impression that you cannot do this to create a superficial loss, but there is nothing that I remember about a gain???

sk
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sunnybono wrote:
Dec 10th, 2013 1:41 pm
I own a blue chip stock for a couple of months now (USD). If I sell now and realize the Capital gain, can I purchase the stock within an hour of the sale or do I have to wait the 30 day period.

I was always under the impression that you cannot do this to create a superficial loss, but there is nothing that I remember about a gain???

sk
Yes you most certainly can realize capital gains. If you have a particularly low income, and aren't otherwise dependant on any sort of income-tested benefit, then it is to your advantage to do so.

For instance, a student who doesn't receive OSAP and has capital gains, probably should realize them each year to consume his/her personal exemption and increase his/her entitlement to GST credits.

At very high income levels, and with lots of deductions, you might become liable for the Alternative Minimum Tax in Canada if a lot of your income is tax-preferred (such as capital gains). However, I have a pretty strong suspicion this doesn't apply to you.
TodayHello wrote:
Oct 16th, 2012 9:06 pm
...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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There is no superficial gain rule.
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Aug 25, 2005
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you are correct about there being a rule against realizing superficial losses but as fastlayne said, no rules against realizing cap gains then repurchasing.
[OP]
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thanks Folkes for your input. Now my next question, since this will be the first time I've done this, can CRA claim that I have now become a day trader if I sell and purchase the same day??
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sunnybono wrote:
Dec 10th, 2013 2:54 pm
thanks Folkes for your input. Now my next question, since this will be the first time I've done this, can CRA claim that I have now become a day trader if I sell and purchase the same day??
Not really. They use factors including leverage, your level of sophistication, whether such is your only source of income, and whether you are claiming other expenses, such as the cost of a trading terminal, to determine such.
TodayHello wrote:
Oct 16th, 2012 9:06 pm
...The Banks are smarter than you - they have floors full of people whose job it is to read Mark77 posts...
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So if you're a studen you should sell all your stocks beofre the end of december?
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sunnybono wrote:
Dec 10th, 2013 2:54 pm
thanks Folkes for your input. Now my next question, since this will be the first time I've done this, can CRA claim that I have now become a day trader if I sell and purchase the same day??
A single trade would not appear on the CRA radar. You have nothing to worry about on this score.
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sunnybono wrote:
Dec 10th, 2013 1:41 pm
I own a blue chip stock for a couple of months now (USD). If I sell now and realize the Capital gain, can I purchase the stock within an hour of the sale or do I have to wait the 30 day period.

I was always under the impression that you cannot do this to create a superficial loss, but there is nothing that I remember about a gain???

sk
thet won't know you are repurchasing, okay?
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westssaa wrote:
Dec 11th, 2013 10:53 am
thet won't know you are repurchasing, okay?
Look up what's on a T5008 trading summary form.
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I mean you only list those stocks having been sold, wouldn't you?

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