Q: Good evening!
I have shares of BCE at an ACB of $55.40, which today closed at $47.03. I thought maybe of establishing a rather large capital loss for future use by selling them and buying Telus as a proxy for the necessary holding time frame of 31 days to confirm the loss. However, looking at the charts I saw that Telus has been fairing a bit better than BCE lately, so I am not sure that there would be some 'reversion-to-the-mean' happening during the 31 days. That could mean I end up with less shares of BCE when the dust settles!
Sort of a two-parter here. First of all, is this a good idea at all? Second of all, if it is, is there perhaps another 'proxy' you might suggest I look at?
Thanks!
Paul K
I have shares of BCE at an ACB of $55.40, which today closed at $47.03. I thought maybe of establishing a rather large capital loss for future use by selling them and buying Telus as a proxy for the necessary holding time frame of 31 days to confirm the loss. However, looking at the charts I saw that Telus has been fairing a bit better than BCE lately, so I am not sure that there would be some 'reversion-to-the-mean' happening during the 31 days. That could mean I end up with less shares of BCE when the dust settles!
Sort of a two-parter here. First of all, is this a good idea at all? Second of all, if it is, is there perhaps another 'proxy' you might suggest I look at?
Thanks!
Paul K
5i Research Answer:
Year to date, T is performing marginally better than BCE, at -8.23% vs -9.85%. We generally encourage tax loss harvesting, especially with more 'stable' stocks that tend not to move dramatically. Assuming one is in a high tax bracket, the tax pick up (could be 33% if one has more than $250K in gains) is likely to be much more than any particular stock movement here. In the communications space, RCI.B could also be used as a proxy, but we would be quite comfortable with T. BCE goes ex-dividend September 16 and T Sept 10 if one wants to time such a trade around dividends.