Aethalon™ | Your Trusted Wealth Partner

In the month of April 2026, we answered the following questions on tax planning.

I contributed to my RRSP in the first 60 days of 2026. Does it automatically deduct my 2025 taxes, or can I choose to apply it to the 2026 tax year instead?
I sold some investments last year at a loss. Can I use that loss to get a tax refund on gains I paid tax on in the previous year?
What are the most forgotten tax deductions we can use in Canada?
Are there tax implications when transferring assets to a spouse?

1. I contributed to my RRSP in the first 60 days of 2026. Does it automatically deduct my 2025 taxes, or can I choose to apply it to 2026 tax year instead?
The contribution goes into your RRSP account and starts growing on tax-deferred basis immediately; but when you claim the deduction is a separate decision entirely. For example, Mary contributes 10,000 to RRSP account in Jan 2026, she can use 10,000 to deduct income in 2025, 2026, or any year in the future. She can also use 5,000 in 2025, and 5,000 in 2026. The tax-filling software automatically applies the entire amount of contribution to deduct income for that tax year. We will need to make a manual adjustment to customize the deduction amount.

Why would you delay the deduction? It depends on your marginal tax rate and payable. If you expect a higher income in 2026, like a promotion/bonus, or a one-time gain from investment/business sale; the same amount of deduction can potentially save more tax for you when applied in a year with higher marginal tax rate and payable.

2. I sold some investments last year at a loss. Can I use that loss to get a tax refund on gains I paid tax on in the previous year?
Yes, this is called a capital loss carryback. Net capital losses can be applied against taxable capital gains from the 3 preceding tax years, potentially generating a refund. To do this, you request the adjustment using Form T1A when filing your current return. Note that capital losses can only offset capital gains, not other incomes. There were a few changes on the inclusion rate of capital gains in history. It's worth reviewing as any future change will impact on how the carryback is applied.

3. What are the most forgotten tax deductions we can use in Canada?
There are several deductions that Canadians may not be aware of when filing their returns.

🚚 Moving expenses may qualify if you relocated at least 40km closer to a new job or school.
💲 If you borrow money to invest outside a registered account, the interest on that loan may be deductible.
🏥 Medical expenses are another area worth reviewing, as eligible costs extend to a spouse or dependent as well.
👩‍💻 Professional and union dues required for your employment are also deductible, as are home office expenses if you worked from home during the year.
💞 For those who donate to charity, the federal credit increases on amounts above $200, and donations from prior years can be carried forward.

Every tax situation is unique, and a qualified tax professional is best positioned to assess what applies to your specific circumstances.

4. Are there tax implications when transferring assets to a spouse?
Yes. Transfers generally occur at cost. Most asset transfers between spouses are deemed to happen at the original cost, not market value, so no capital gain is triggered at the time of transfer. The gain is deferred until the receiving spouse eventually sells.

CAUTION: attribution rules apply. Income earned on transferred assets like interest, dividends, or capital gains can be attributed back to the transferring spouse and taxed in their hands. This limits the ability to shift investment income to a lower-income spouse, and draws scrutiny and fines by CRA if not planned and executed properly.

Separation changes the rules entirely. Transfers made under a formal separation agreement follow a different set of rules, and legal documentation is essential.

The intersection of family law, estate planning, and tax here is genuinely complex. We strongly recommend working with both a tax professional and a wealth advisor before making any transfers.

2026 April Weekly Q&A - Tax Planning