Can I sell a stock at a loss and buy it back?
You can, but the loss may not be usable if the repurchase falls inside the window the rules draw around the sale. Several systems restrict this, under different names and with different tests, so a cross-border investor can be inside one country's rule and outside the other's on the same pair of trades. The restriction generally attaches the denied loss to the cost of the replacement holding rather than destroying it, so the effect is often deferral until you are genuinely out of the position. Check the rule that applies to the return you file before selling, not afterwards.
What counts as a wash sale if I use two brokers?
Using two accounts does not put you outside the rule. The tests look at the property and at the person, not at the statement it happens to appear on, so selling at one broker and buying at another is the same pair of trades for this purpose. A broker only reports what it can see, which is why a statement can show a clean loss while the return should not. If you hold the same security in more than one account, or in more than one country, build a single trade list across all of them before deciding which losses to claim.
Does the wash sale rule apply in Canada?
Not under that name. Canada restricts the same behaviour through its superficial loss provisions, and while the idea is similar the tests are not identical: the property that counts, the people whose purchases count, and the consequence of a denial each differ from the United States rule. A loss can therefore be disallowed in one country and allowed in the other on the same facts. If you file both returns, the two computations have to be run separately on their own rules, with the difference documented, rather than one being copied across.
Is a disallowed loss gone for good or just delayed?
Usually delayed, sometimes gone, and the difference is worth checking before you trade rather than afterwards. Where the denied loss attaches to the cost of the replacement holding, you recover it when you eventually sell without repurchasing. Where the replacement sits somewhere the loss can never come back out, such as a plan whose gains and losses are outside the tax computation altogether, the loss is lost rather than postponed. Which of the two you get depends on the country whose rule applies and on who made the replacement purchase.
Does buying in my spouse's account break the loss?
It can. These rules generally look beyond the person who sold to a defined group of connected persons and entities, so a purchase by a spouse, or by a company or trust connected to you, can deny the seller's loss. Which relationships count differs between systems, which is precisely the trap for a household that files in two countries. Before a year-end sale, list every account in the household and every entity you control, then check the window on both sides of the intended trade. It is a short exercise and it cannot be done after the fact.
Can a US wash sale still be a loss on a Canadian return?
It can, and the reverse is possible too, because each country tests the trades under its own provisions. That produces two different gain and loss figures on the same portfolio and two different cost bases going forward. There is a second divergence people miss: each return measures the transaction in its own currency, so a position sold at a loss in the trading currency can produce a gain in the currency of the return, or the other way round. Run each computation on its own rules in its own currency, then reconcile them for relief purposes.
Is double taxation legal?
Yes. Nothing prevents two countries from taxing the same income under their own domestic law — each is exercising its own jurisdiction. What treaties and credit systems do is relieve the outcome rather than prohibit the charge, and relief is generally something you must claim on a return or a form, not something applied automatically. Miss the claim and the double charge stands. Double taxation explains the mechanism.
What is double tax relief and how is it given?
Three mechanisms, and which one you get depends on your residence country's law and the treaty. Exemption leaves the foreign income out of the residence-country base. Credit taxes it and then subtracts the foreign tax, capped at the residence-country tax on that income. Deduction merely reduces taxable income by the foreign tax, and is usually the weakest. Canada and the United States lead with credit; several treaties give exemption for specific income types. See claiming the credit.
