Wash sale rules for stock in Canada?

I am trying to offset realized stock gains with accumulated unrealized losses before year's end.





In the US, if you sell a stock at a loss, then buy the same stock less than 30 days later, the capital loss on the initial sale is disallowed in what is called a ';wash sale';.





I can't find anything on the CRA website that is similar to this. Is there no such thing as a wash sale in Canada? I know the rules for buying/selling identical shares as far as how the ACB is adjusted. But is the loss allowed?





Example:


21 Jan 2007 Buy 100 shares RY @ 51. ACB = 5100.


19 Dec 2007 Sell 100 shares RY @ 41. ACB = 0. Loss is 1000.


21 Dec 2007 Buy 100 shares RY @42 ACB = 4200.


Is this correct? Wash sale rules for stock in Canada?
It is called the ';superficial loss rule';. The loss is denied and then added to the cost base of the re-acquired shares, i.e., $5200 ($4200+$1000) for the Dec 21 shares in your case.





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.





A capital loss will be defined as superficial if, during the thirty days on either side of the date of sale that triggered the loss, the taxpayer or an affiliated person (i.e. his/her spouse or a corporation controlled by the taxpayer or his/her spouse) purchased that same property, or one that is identical to that property. Also, if a “right to purchase” that same property is owned at the end of the period noted above, the loss will be deemed superficial.





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.