How to calculate capital gain or loss?

[Al2009]

What do you do on your taxes when you buy and sell at different prices? If I buy 100 shares at $10 and then another 100 at $8 and then sell 100 at $7, how do I calculate the loss on this? Do I take the first 100 at $10 and take a $3 loss per share? Or do I use the average price of $9 and take a capital loss of $2 per share?

[WildEmu]

You calculate your ACB based on weighted average. So in your example, you spent $1,800 to purchase 200 shares, so the ACB of each share is $9. If you then sell at $7, you will be taking a capital loss of $2 per share.

[Al2009]

Thanks, so that means I have 100 shares at $9 for tax purposes? In 2009 if I buy another 100 shares for $11 this takes the average to $10? And then if I sell for $12 I have a $2 gain per share?

[tjthemanto]

What do you do on your taxes when you buy and sell at different prices? If I buy 100 shares at $10 and then another 100 at $8 and then sell 100 at $7, how do I calculate the loss on this? Do I take the first 100 at $10 and take a $3 loss per share? Or do I use the average price of $9 and take a capital loss of $2 per share?

Yes you calculate the ACB ( Adjusted Cost Base ) for these shares.

Also don't forget the commissions you incurred when you bought or sold these shares , they are deductible as well & will reduce the capital gains you have to pay in case you have any.

http://www.cra-arc.gc.ca/E/pub/tg/t4037/t4037-e.html#P1185_82580

See Example 1 & Example 2 in the above link by revenue canada to see the calculation for ACB when you buy & sell shares at different prices & different transactions.

[ray420]

What do you do on your taxes when you buy and sell at different prices? If I buy 100 shares at $10 and then another 100 at $8 and then sell 100 at $7, how do I calculate the loss on this? Do I take the first 100 at $10 and take a $3 loss per share? Or do I use the average price of $9 and take a capital loss of $2 per share?

Just remember superficial loss rules if you purchase these shares again within 30days

[Al2009]

Thanks everyone. I'm aware of the 30 day rule.

[Observer135]

Since there are so many knowledgeable people on this forum, I thought I would ask this here without starting a new thread.
If I have not claimed capital losses or trading commissions of previous years but claimed capital gains, can I carry those losses or commission expenses forward and claim them for 2008? And if so, how far back can I go?
Thank you

[ray420]

Since there are so many knowledgeable people on this forum, I thought I would ask this here without starting a new thread.
If I have not claimed capital losses or trading commissions of previous years but claimed capital gains, can I carry those losses or commission expenses forward and claim them for 2008? And if so, how far back can I go?
Thank you

Commissions are added to your cost base, capital losses can be carried back 3 years and indefinitely into the future, so you can apply 2008 losses against losses up to 3 years ago or anytime into the future.

[Observer135]

Commissions are added to your cost base, capital losses can be carried back 3 years and indefinitely into the future, so you can apply 2008 losses against losses up to 3 years ago or anytime into the future.

OK, thank you for the reply and your help is much appreciated. Don't you mean I can apply 2008 losses against "gains" up to 3 years ago? You said losses against losses, this does not make sense, right!
If you are trying to confuse me more than I already am, you sure are doing one heck of a job, :D

[rfdrfd]

OK, thank you for the reply and your help is much appreciated. Don't you mean I can apply 2008 losses against "gains" up to 3 years ago? You said losses against losses, this does not make sense, right!
If you are trying to confuse me more than I already am, you sure are doing one heck of a job, :D

I'm pretty sure that's what he meant. Losses against future GAINS.

Personally, I'm too lazy to fill out a form to recalculate the taxes I paid on gains I had (up to 3 yrs) ago. I'm pretty sure I'm going to have Capital gains sometime in the future, well we all hope that right? So I'm sure I can use the losses, that we can carry forward forever, to reduce the capital gains I have in the future.

[Archanfel]

I'm pretty sure that's what he meant. Losses against future GAINS.

Personally, I'm too lazy to fill out a form to recalculate the taxes I paid on gains I had (up to 3 yrs) ago. I'm pretty sure I'm going to have Capital gains sometime in the future, well we all hope that right? So I'm sure I can use the losses, that we can carry forward forever, to reduce the capital gains I have in the future.

I did it this year. CRA sent me 3 reassessment letters. Now I know where all the tax dollar went :D.