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I sold 250 shares of a stock at a loss of (-1,000). 2 weeks later bought a single put contract (100 shares) n the same stock. If I sell the put option for profit a few days later, is this a partial superficial Loss (wash sale)? If so, how do I calculate it? (CRA, Canada)

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  • I'm voting to close this question because it is identical to this question other than the locale in the tags. Nov 30 '20 at 1:39
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    @BobBaerker - Because I have no clue - Are Canadian wash rules the same as US? Including the nuance of how an option purchase affects the issue? Nov 30 '20 at 13:21
  • @JTP - Apologise to Monica - see my answer Nov 30 '20 at 14:48
  • @BobBaerker - so, identical. We can close this as a duplicate, as you commented. Dec 5 '20 at 13:48
  • It's your call. identical questions. Different country tags. Dec 5 '20 at 14:41
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Superficial losses are defined by section 54 of the Canadian Income Tax Act (ITA). If a capital loss is realized in such a way that it falls under the definition in the ITA, the loss cannot be used in the year realized but, rather, it will be added to the adjusted cost base of the property to reduce future gains or increase future losses.

In other words, during the thirty days before and after the sale date, no purchases can be made in the property to be sold or a property that is deemed to be “identical” by the taxpayer or a person affiliated with him/her. Hence, there is a sixty-one day period of which to be aware. Further, neither the taxpayer nor an affiliated person can own a call option on that same property at the end of the sixty-one day period.

From Turbo Tax Canada:

A superficial loss occurs when you dispose of capital property for a loss and you, or a person affiliated with you, buys or has a right to buy the same or identical property during the period starting 30 calendar days before and ending 30 calendar days after the sale.

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  • The loss from the disposition of the put contract at a lower price than the acquisition of the put contract within a few days is a superficial loss. But OP adds the information that shares of the same stock were sold 2 weeks prior, does this affect the calculation of the loss on the put contract?
    – Etienne D.
    Dec 2 '20 at 22:19
  • @Etienne D. - The OP sold his put for a gain not a loss. His question pertains to whether buying the put after realizing the equity loss is a superficial loss. A long position is the stock benefits if share price rises. A long put benefits if share price drops. Hence, they are not identical positions and cannot create a superficial loss. If he had instead purchased a call then it would have been a problem and the loss on 100 shares would have had to be deferred. Dec 2 '20 at 23:11
  • Thanks for the clarification. Your original answer clearly explains that the properties need to be "identical" for the loss to be superficial, but you comment adds that in this case (share and put) they are not identical.
    – Etienne D.
    Dec 2 '20 at 23:37

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