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To what extent can a capital loss lead to a tax reduction?



Our response:

Thank you for your question, Michael.

If you sell an investment for less than you paid for it, you get a capital loss. At tax time, you subtract your capital losses from your gains (a capital gain happens when you sell an investment for more than you paid for it). This gives you your net gains. You pay tax on 50% – or half – of your net gains. The Canada Revenue Agency provides more details about how to use a capital loss.

Read our article about investors and tax.

We are not able to provide advice on individual taxes. Speak to a financial advisor or tax professional for advice about capital losses.

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