Superficial loss

A superficial loss can occur when you dispose of capital property for a loss and both of the following conditions are met:

Some examples of affiliated persons are:

If you have a superficial loss in 2023, you cannot deduct it when you calculate your income for the year. However, if you are the person who acquires the substituted property, you can usually add the amount of the superficial loss to the adjusted cost base of the substituted property. This will either decrease your capital gain or increase your capital loss when you sell the substituted property.

In certain situations, when you dispose of capital property, the loss may not be considered a superficial loss.

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