Superficial Loss - 30 day Rule

[pageone]

Hi there...looking for clarification on the superficial loss (30 day rule). In a non-registered investment account, I sold shares of a few stocks this past year. I have received a T5008 from the financial institution and entered this using the T-Slips entry screen in TurboTax. I did repurchase some of the stocks within 30 days and understand from CRA there is superficial loss -30 day rule. Do I need to make an entry in TurboTax for this? If so what entry screen do I use for this? Using TurboTax Desktop version.

[TurboTaxSusan]

If you have a superficial loss, you can add the amount of the superficial loss to the adjusted cost base of the substituted property.

[pageone]

Hi there Great. To confirm then, other than the T5008 information, there is no entry to make for the repurchase of the stock in the 30 day window in TurboTax. Of course, any purchase/sell of stock is to be tracked for ACB purposes. Is this correct?

[TurboTaxSusan]

Yes.

[pageone]

Ok. Still a little confused so I'll ask another way. If I sell 100 shares at a loss. Then within 30 days purchase the same company shares again, let's say 40 shares. I can only claim the loss on 100 - 40 = 60 right? How do I enter this in TurboTax. The T5008 will state the sale of the 100 shares. As I understand, you have to enter exactly what is on the T5008 so the sale of the 100 shares must be entered. Does that make sense?

[TurboTaxSusan]

You enter the amounts from your T5008. Then you add the amount of the superficial loss to Box 20 of the T5008.

If you would prefer to talk to some, you can contact our phone support team at 1-888-829-8608.

[pageone]

Great. I called earlier today but the rep had no idea what I was talking about. He made me wait while he did some research. He got nowhere. Got nothing from that. Nice guy though!

[pageone]

So if I call in again. What am I asking? How do I add the amount of the superficial loss to Box 20 of the T5008?

[TurboTaxSusan]

I'm just not sure how else to explain it. If you sold 100 shares and had a loss of $100, but you have a superficial loss of $40, then you can't claim the full loss of $100. So you add the  superficial loss to your ACB in Box 20: ex: $200 +(-$40) = $160. So then you would only be claiming the real loss of $60. 

[pageone]

TaxTips.ca - Superficial Losses and Other Disallowed Losses

I think the article explains this well. I ended up using a spreadsheet to determine the Superficial Loss for the stocks in question. For TurboTax, using the T5008 T-Slips entry screen, I entered amounts given in Box 20 and Box 21 for each stock listed on the T5008 I received. For any stock with a Superficial Loss, I entered the negative amount as a new entry in Box 20.  The first T5008 stock entry would cause a capital loss if Box 20 is greater than Box 21. The second Superficial Loss stock entry would decrease the amount of capital loss claimed, based on the Superficial Loss (30 Day Rule) or, if the amount is large enough, zero out or cancel the capital loss from the first entry. End result for filing is either the amount of capital loss claimed is reduced or eliminated.