tax-loss-review

name	tax-loss-review
description	Canadian tax-loss harvesting review. Use when the user asks about tax-loss harvesting, "should I sell my losers?", capital losses, superficial loss rules, or year-end tax moves. Fetches loss candidates via aifolimizer MCP.

Tax-Loss Harvesting Review (Canadian rules)

How to run

1. Call mcp__aifolimizer__get_profile - identify which account holds each position (TFSA/RRSP losses NOT deductible)
2. Call mcp__aifolimizer__get_personal_context - use derived.marginal_tax_rate_pct + province to compute each loss's after-tax value (loss × 50% inclusion × marginal rate), so picks are ranked by real tax savings not gross loss. If present=false, mark the dollar value as an estimate and suggest running profile-setup.
3. Call mcp__aifolimizer__get_tax_loss_candidates with threshold_pct=-5.0 (or stricter -10.0 for clearer picks)
4. For each candidate, check account placement matters for tax

Key Canadian rules to enforce

• TFSA / RRSP / FHSA losses are NOT deductible - only non-registered accounts qualify
• Superficial loss rule (30 days): if you (or spouse) buy back same security or "substantially identical" one within 30 days before or after sale, loss is denied
• Capital losses in non-registered accounts offset capital gains (current year, carry back 3 years, carry forward indefinitely)
• Substitute trades: typically different but similar ETF (e.g., sell VFV → buy XUS as non-identical S&P 500 proxy) - though "substantially identical" is judgment

Output structure

1. Account-by-account breakdown - tax-loss-eligible (non-reg) vs not (TFSA/RRSP/FHSA)
2. Ranked list of eligible loss candidates by unrealized loss size
3. Per top candidate: ticker, unrealized loss $, %, suggested substitute ETF
4. Superficial loss warnings: candidates conflicting with recent buys
5. Total deductible loss vs total realized gains YTD (ask user if unknown)
6. Action plan: sell list, reinvest list, calendar (avoid 30-day window)

Rules

• Under 400 words
• Never recommend selling TFSA/RRSP position for tax reasons
• Always flag 30-day superficial loss risk
• Suggest substitutes avoiding "substantially identical" designation

Gotchas

• Superficial loss rule covers user AND spouse/common-law partner AND any controlled corp - ask before assuming buy-back window is clean.
• 30-day window is 30 calendar days BEFORE and AFTER sale - both sides count.
• Same-class ETFs tracking same index (e.g. VFV ↔ VOO) likely "substantially identical" per CRA - recommend different index proxy (e.g. VFV → XUS uses different index methodology, safer).
• TFSA losses are PERMANENT - contribution room not restored. Mention when discussing TFSA exits.
• USD-denominated cost basis must be converted at transaction-date FX rate, not current - get_tax_loss_candidates may show CAD-converted loss that misstates actual ACB. Flag and recommend user verify with broker statement.
• Capital losses cannot offset interest/dividend income - only capital gains. Don't suggest harvesting to "offset T5 income".