Capital losses must settle by December 31 to count for 2026, which makes Wednesday, December 30 the last day a sale in a non-registered account can be used this year. That leaves 86 days from today, with the TSX closing early at 1:00 PM ET on Thursday, December 24. Under T+1 settlement, a sale made on December 31 settles in January 2027 and belongs to the 2027 tax year.
The window matters now because the Bank of America client flow note that recorded nine straight weeks of retail net selling also flagged more tax-loss selling ahead. The S&P/TSX Composite closed October 2 at 35,502.65, about 3.9% below its closing high of 36,957.60 on August 25. An index level says little about individual positions, though, because losses sit in particular holdings and not in the average.
Only Non-Registered Accounts Generate a Usable Loss
A loss realized inside an RRSP, TFSA, FHSA or RESP cannot be claimed, and it cannot be carried to any other account. The rule applies to taxable accounts: individual, joint, and corporate investment accounts. The first planning input is therefore the list of non-registered holdings trading below their adjusted cost base, not the performance of the portfolio as a whole.
The second input is the pool of gains the loss can be set against. A net capital loss first offsets capital gains realized in 2026. Any remainder can be carried back three years through Form T1A against net taxable capital gains of 2023, 2024 and 2025, or carried forward without limit. The inclusion rate has been 50% throughout, because the proposed increase to two-thirds was cancelled, so a carryback does not meet a different inclusion rate. The recovery is calculated on tax actually paid in the earlier year, not at 2026 rates.
The Bracket Sets the Value of the Loss
The Ontario combined rate on capital gains rises from 9.53% on the first $53,891 of taxable income to 26.76% above $258,482, so a realized loss shelters 2.8 times as much tax in the top bracket as in the first. The same $10,000 loss is worth $953 in one case and $2,676 in the other.
Rates are combined federal and Ontario marginal rates on capital gains at a 50% inclusion rate, including Ontario surtaxes. Dollar figures in the note multiply each rate by $10,000.
Rates differ by province and for corporations, so the table covers individuals in Ontario only. The spread still shows why two clients holding the same losing position can face different harvest decisions: the benefit is the loss multiplied by the rate on the gains it offsets, and the lower-bracket client may have no gains to offset at all.
The 61-Day Window Catches the Accounts Most Often Forgotten
The superficial loss rule denies a loss when the same or identical property is bought in the 30 days before or after the sale and is still held at the end of that period. That is a 61-day window. The purchase does not have to come from the same account or the same person. A spouse or common-law partner, a corporation controlled by the taxpayer or spouse, and the taxpayer RRSP and TFSA are all affiliated for this purpose.
The last case is the costly one. A denied loss from a repurchase in a taxable account is added to the cost base of the new shares and recovered on a later sale. A repurchase inside an RRSP or TFSA is permanently lost, because those accounts have no adjusted cost base to receive it. A reinvestment plan that buys shares automatically inside a registered account during the window produces the same result without anyone placing a trade.
Holding a similar but not identical security keeps market exposure while the window runs. Sales planned for the final week of December leave the least room, since the 30 days after a December 30 sale extend into January and a purchase by a spouse or a registered account anywhere in that stretch is caught.