Canadian equity markets, Exchange Traded Funds, mutual funds and individual Canadian stocks have had less than a stellar year in 2011 to date. On average, most Canadian securities are trading at lower levels than recorded on December 31st 2010. The TSX Composite Index is down 10.2 percent. Opportunities to reduce capital gains tax are available by switching out of Canadian listed securities with a capital loss prior to the close on December 23rd. Realized losses can be applied against realized capital gains, can be carried back three years or can be carried forward indefinitely.
Investors can avoid the 30 day rule set by the tax man when realizing capital losses. Investors are required to wait 30 days before buying back a security in order to preserve the loss for tax purposes. Instead of waiting for 30 days to repurchase a favoured security, investors simply can switch into securities that have comparable investment characteristics. Opportunities to switch from existing Canadian listed ETFs trading at a loss into similar ETFs are listed below. Leveraged ETFs were not included in the survey. ETFs with a loss of 10.0 percent or more since the beginning of the year were identified:
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