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With 2012 nearing its end, how can I lower my taxes?

Nancy Woods, adviser with RBC

Deborah Baic/The Globe and Mail

Dear Nancy Woods,

This is the time of year that I look to see if I need to sell any holding for tax-loss selling.  Is there anything else I should be doing because the end of the calendar year is coming up?

Signed, Peter

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Dear Peter,

You can look at realizing a capital loss to offset any realized gain that you may have taken. It is a good idea to keep a running total from the beginning of the year, so that you are not rushing to the door with everyone else. One thing I will stress is that the tax decision should not drive the investment decision.

Some things to consider: If you are going to sell a stock that is down from your cost price, is it going to recover?  Does it make sense to wait 30 days and buy it back because you still think it is a good investment?  (There is a tax rule that says that you cannot declare the capital loss if you are still the beneficial owner of the security if you buyback the stock within 30 days).

Another thing you can look at is if you had declared a capital gain back in 2009, do you have a capital loss this year and does it make sense to carry it back the three years to claim back the tax paid? You can only carry back a tax loss three years, but you can carry it forward indefinitely.

As for other year-end items you should look at: if you are retired or have low income, does it make sense to de-register funds from your registered plan if you are in a low tax bracket?  For those that have not turned their RSP into a RIF, does it make sense to flow through $2,000 through a RIF and declare the $2,000 pension income?  You would get an offsetting pension income tax credit for $2,000.

I would also suggest that you review your will to check for any material changes that would necessitate an amendment to your existing document. For example, if you got married this year, your previous will is no longer valid.  If you don't have a will, make it a priority to have one drawn up.  If you handwrite your wishes yourself and date it, it is much better than dying without a will (also referred to as intestate).

Finally, check your year-to-date donations to charity. Maybe this is the time of the year to do it.

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Nancy Woods, CIM, FCSI is an Associate Portfolio Manager and Investment Advisor with RBC Dominion Securities Inc.  To subscribe to her newsletter, visit her website  To ask her a question, send an email to

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About the Author

Nancy Woods, CIM, FCSI, is an associate portfolio manager and investment adviser with RBC Dominion Securities Inc. More


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