Q&A: Stock losses in RRSPs

Question: I’m trying to confirm what the tax implications are of stocks within your self-directed RRSP. I understood at one time that you could not take advantage of a stock loss while in your portfolio. Is this still true? Are the stock gains in a self-directed RRSP taxed the same as outside or at a higher rate of tax? Thanks for your help. – Frances M.

Gordon Pape answers: You have been misinformed. Stock losses inside an RRSP have never been tax deductible. Any gains within the plan are not taxed at the time they are realized, but you will have to pay tax on them at your marginal rate when you withdraw the money. That means you’ll probably end up paying tax at a higher rate than if you’d realized the gains outside the RRSP. Offsetting that is the fact it may be years before any tax will actually have to be paid.

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