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Tax-loss selling involves selling investments with accrued losses prior to December 31 to offset capital gains realized either elsewhere in your portfolio or from the sale of another asset, such as a vacation home or property.

In order for such losses to be available for 2015, trades of Canadian-listed securities must be made no later than December 24, 2015, and trades of U.S.-listed securities must be made by December 28, 2015.

“Tax-loss selling is a popular topic this year after the rocky year most major stock markets have had,” says Jamie Golombek, managing director of Tax & Estate Planning at CIBC Wealth Advisory Services. “If you purchased securities in a foreign currency, don’t forget that capital gains are calculated in Canadian dollars — so currency fluctuations can be a key factor in determining whether you’re in a loss position.”

For example, the decline in the value of the Canadian dollar may increase capital gains or decrease capital losses, or in some cases, turning what looks like a gain into a loss.

For more on tax-loss selling and tax planning, read:

Capitalize on investment losses

Tax-loss selling: Using Canadian-listed ETFs to defer taxes on capital gains

Do fees or taxes hit portfolios harder?

TFSAs back to $5,500 as of Jan. 1. Here’s what to do

Most Canadians ignorant of tax deadlines

Canadians risk paying more tax if they fail to plan: Golombek

Originally published on Advisor.ca

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