The superficial loss rule: the 30-day trap
You sell an investment at a loss to save on tax — then buy it right back. It feels harmless, but the CRA may simply refuse to let you claim that loss. The superficial loss rule denies a capital loss when you, or anyone affiliated with you, repurchase the same security inside a roughly 61-day window around the sale. This guide explains exactly when it bites, why your TFSA, RRSP, and spouse count, and how to harvest losses without losing them.
The short answer
- What it isA denied capital loss when you rebuy too soon
- The window61 days — 30 before, the sale day, 30 after
- Who countsYou, your spouse, your TFSA & RRSP (affiliated persons)
- Stay onsideWait 31 days or buy a similar — not identical — security
What the superficial loss rule actually says
A capital loss is denied when you or an affiliated person rebuy the identical property within 30 days either side of the sale and still own it.A superficial loss is a capital loss that the CRA denies — it disallows the deduction — when two conditions are both true. First, you, or a person or entity affiliated with you, buy the same or identical property in the window running from 30 calendar days before the sale to 30 calendar days after it. Second, you (or that affiliated person) still own the substituted property at the end of that period. If both are met, the loss is superficial and you cannot claim it on the disposition.
Because the rule reaches back 30 days, captures the day of the sale, and stretches forward another 30 days, it is commonly described as a 61-day window. The mechanism lives in the Canadian Income Tax Act (the definition of a superficial loss in section 54, and the loss-denial in paragraph 40(2)(g)(i)), and it applies to capital losses across stocks, ETFs, and mutual funds alike. It is fundamentally the rule that governs tax-loss harvesting — the practice of deliberately selling losers to offset gains — and it is the single most common way DIY investors accidentally wipe out the benefit they were trying to capture.
The 61-day window, visualized
The window is 30 calendar days before the sale, the day of the sale, and 30 calendar days after — calendar days, not trading days.The danger zone is not just "after you sell." It is symmetric. Buying back too early — in the 30 days before you sell the loss position — can be just as fatal as buying back too soon afterward. Here is how the three pieces fit together:
30 days before + the day of the sale + 30 days after = the 61-day window. These are calendar days, not trading days. A repurchase of the identical property by you or an affiliated person anywhere in this span — that is still held at the end of it — makes the loss superficial.
Who counts as an "affiliated person" (this is the surprise)
Affiliated persons include you, your spouse, a corporation you control, and trusts you are a majority beneficiary of — which captures your RRSP and TFSA.The rule does not just watch your taxable account. It watches a whole circle of affiliated persons. If any of them buys the identical security in the window, your loss is denied. The circle includes:
- Yourself — your own accounts, taxable or registered.
- Your spouse or common-law partner — including their accounts.
- A corporation controlled by you or your spouse.
- A trust of which you are a majority-interest beneficiary — which crucially captures your RRSP and your TFSA.
That last point is the one that catches people. Because your RRSP and TFSA are treated as affiliated trusts, selling at a loss in your non-registered (taxable) account and rebuying the same security in your TFSA, RRSP, your spouse's account, or your spouse's registered accounts all trigger the superficial loss rule. The repurchase does not have to happen in the same account — or even the same person's hands — to spoil the loss.
The loss is not lost — it is deferred (usually)
A denied superficial loss is added to the ACB of the repurchased property, so you recover the benefit when that property is eventually sold.Here is the reassuring part: in the ordinary case, a denied superficial loss is deferred, not destroyed. The disallowed amount is added to the adjusted cost base (ACB) of the repurchased substituted property held by the affiliated person. A higher ACB means a smaller capital gain — or a larger loss — when that property is eventually sold. So you recover the benefit you couldn't claim today, just at a later date, when the substituted shares are finally sold in a non-registered account. (Tracking that bumped-up ACB correctly is its own discipline; see our guide on tracking your adjusted cost base.)
The registered-account trap: a permanently lost loss
Rebuying inside an RRSP or TFSA denies the loss with no ACB to attach it to — so the loss is gone for good, not deferred.The deferral safety net has a hole, and it is a bad one. If you sell at a loss in a taxable account and rebuy the identical security inside your RRSP or TFSA, the loss is denied AND permanently lost. The reason is mechanical: registered accounts do not track an adjusted cost base for tax purposes, so there is no ACB for the denied loss to attach to. The usual "added to the ACB" cure simply has nowhere to apply.
This is strictly worse than the everyday affiliated-person deferral. With a normal repurchase in a taxable account, you'll eventually get the loss back through a higher ACB. With a repurchase inside an RRSP or TFSA, the loss evaporates with no future recovery. It is the most expensive mistake in this whole area — and easy to make, because so many investors think of "my TFSA" and "my taxable account" as the same pool of money. To the rule, they are affiliated but separate.
A worked example: harvesting a $5,000 loss
Rebuy the same ETF 10 days later in a taxable account and the loss is deferred to ACB; rebuy it in your TFSA and the loss is gone for good.Say you sell 100 shares of an ETF at a $5,000 loss to harvest it, then rebuy the same ETF 10 days later and still hold it. Because the repurchase falls inside the 30-day-after window and you still own the shares, the $5,000 loss is denied. Where you rebought it decides what happens next:
| Capital loss claimed now | $0 |
| $5,000 added to ACB? | Yes |
| Recovered when shares sold? | Yes |
| Capital loss claimed now | $0 |
| $5,000 added to ACB? | No ACB exists |
| Recovered when shares sold? | Never |
Same sale, same security, same 10-day gap — but the destination of the rebuy is the difference between a loss you'll eventually recover and a loss you'll never see again. That is the whole rule in one picture.
How to harvest losses and stay onside
Wait 31 days, or buy a similar (not identical) security, keep the rebuy out of registered and spousal accounts, and watch year-end.None of this means you should avoid tax-loss harvesting — it just means doing it deliberately. These are general practices, not personalized advice, but they are how careful investors stay clear of the rule:
- Wait at least 31 days before repurchasing. Letting the full 30-day-after window pass before you rebuy the identical security clears the back half of the danger zone.
- Buy a similar — but not identical — security to hold the market. A different fund or ETF tracking a comparable index keeps you invested during the wait. Two different providers' index ETFs are generally not "identical property," but confirm the two are genuinely not identical before relying on it.
- Don't rebuy in your TFSA, RRSP, or your spouse's accounts. Those are affiliated persons, so a rebuy there during the window triggers the rule — and for registered accounts it makes the loss permanent.
- Mind the year-end window. A late-December loss sale plus an early-January rebuy can still be superficial, because the 30-day-after window crosses the calendar year. Plan harvest sales with the full window in mind.
For the bigger picture on offsetting and reducing capital gains, see our guides on ways to reduce capital gains tax and how capital gains are taxed, or run the numbers in the capital gains tax calculator.
Harvesting losses the right way
The superficial loss rule is just one piece of tax-loss harvesting. Pair it with these guides and tools to crystallize losses without losing them.
Frequently asked questions
Common questions on what the rule is, the 31-day wait, whether it hits your TFSA and RRSP, similar ETFs, and your spouse.What is the superficial loss rule?
The superficial loss rule is a Canadian tax rule that denies a capital loss when you sell a security at a loss and then buy back the same or identical property too soon. Specifically, the loss is disallowed if you — or a person or entity affiliated with you — buy the identical property within 30 calendar days before or 30 calendar days after the sale, and still own that substituted property at the end of that period. Because the day of the sale sits between those two 30-day stretches, it is often described as a 61-day window. The rule is central to tax-loss harvesting, and it is what trips up DIY investors who sell to crystallize a loss and immediately rebuy.
How long do I have to wait to rebuy?
To stay onside, wait at least 31 days after the sale before repurchasing the identical security — that clears the 30-day-after side of the window. The rule looks at the 30 calendar days before the sale, the day of the sale itself, and the 30 calendar days after, so the safe move is to let the full after-window pass before buying back. If you want to keep market exposure during the wait, you can buy a similar but not identical security in the meantime. Just confirm that the two securities are genuinely not "identical property" before relying on that.
Does the superficial loss rule apply to my TFSA or RRSP?
Yes, and this is the trap that surprises most investors. Your TFSA and RRSP count as affiliated persons because they are trusts of which you are a majority-interest beneficiary. So if you sell a security at a loss in your taxable account and rebuy the identical security inside your TFSA or RRSP within the window, the superficial loss rule is triggered. Worse, in a registered account there is no adjusted cost base for the denied loss to attach to — so the loss is denied and permanently lost, not merely deferred.
Can I buy a similar ETF instead?
Generally yes. The rule applies to "identical property," which means the same security. Two different funds or ETFs that track the same or a similar index are generally not identical property — for example, switching from one provider's S&P/TSX index ETF to a different provider's is a common way investors stay onside while keeping comparable market exposure. That said, whether two securities are truly "identical property" is a fact-specific question, so confirm the specifics with a tax advisor before you rely on it.
Is the denied loss gone forever?
Usually no — in most cases it is deferred, not lost. When a superficial loss is denied, it is added to the adjusted cost base (ACB) of the repurchased substituted property held by the affiliated person. A higher ACB means a smaller gain (or larger loss) when that property is eventually sold in a non-registered account, so you recover the benefit later. The major exception is the registered-account trap: if you rebuy the identical security inside your RRSP or TFSA, there is no ACB for the denied loss to attach to, so it is denied and permanently lost.
Does it apply if my spouse buys the same stock?
Yes. Your spouse or common-law partner is an affiliated person, as are a corporation they control and their registered accounts. So if you sell a security at a loss and your spouse (or your spouse's RRSP or TFSA) buys the identical security within the window and still holds it at the end, the superficial loss rule is triggered. The list of affiliated persons also includes you, your own RRSP and TFSA, and a trust of which you are a majority-interest beneficiary. Coordinating with a spouse before harvesting losses avoids accidentally tripping the rule.
General information, not tax advice. This guide describes how the Canadian superficial loss rule generally works, but two key questions can be highly fact-specific — whether two securities are "identical property," and exactly who qualifies as an "affiliated person" in your situation. Before you act on a loss-harvesting plan, confirm the details with a CPA or qualified tax advisor. Read the companion guides on tax-loss harvesting and how capital gains are taxed.