Wants to lock in a capital loss

Question: I am trying to take care of this year’s tax losses using shares of JDS Uniphase. Can I sell JDSU (Nasdaq) at a loss and replace it with JDU (TSX) simultaneously without incurring the tax man’s wrath? The above cannot be inter-traded, each trades on its own exchange: JDU solely on the TSX, and JDSU solely on Nasdaq, they are different certificates. This would not work with Nortel as it is the same stock certificate on all exchanges. – J.A.


If there is a lot of money involved, I suggest you contact a tax lawyer on this question. I do not have such professional qualifications.

On the face of it, it appears to me that Canada Customs and Revenue would likely take the position that the move you describe does not constitute a legitimate sale for purposes of crystallizing a capital loss. Leaving the technicalities of the share certificates aside, the bottom line is that you will be selling shares in a company and then simultaneously buying them back again, albeit on different exchanges.

As you know, the law requires that to claim a capital loss, you cannot repurchase a security within 30 days of selling it. – G.P.