Losses from the sale of shares will not be deductible if the value is repurchased within two months

Managing capital losses derived from stock market investments requires strict control over transaction timing. A recent resolution from the Dirección General de Tributos (DGT) focuses on the prohibition of computing losses when there is a repurchase of similar securities within a very short period of time.

What the DGT has resolved

The ruling analyzes the possibility of deducting capital losses in Personal Income Tax (IRPF) following the sale of company shares. The criteria establish that losses derived from the transfer of securities admitted to trading cannot be computed if homogeneous securities are acquired in the two months preceding or following the sale.

In the scenario presented, the administration distinguishes the nature of the operations:

• If the sale occurs without a repurchase within the two-month interval (before or after), the loss is imputable.
• If a repurchase of homogeneous securities is made within that two-month margin, the loss cannot be computed in the current tax period.
• In these cases, the non-imputable losses will be integrated as the securities remaining in the assets are transferred.

What this means for you

For individual investors, this implies that the strategy of selling a position at a loss to offset other gains and, immediately thereafter, repurchasing the same stock or very similar securities, will have no immediate tax effects. If the repurchase occurs within the two months following the sale, the generated loss will be blocked for use in that year's tax return.

The regulation seeks to prevent these transfers from being used to generate artificial losses that reduce the IRPF taxable base without there having been a real change in the composition of the taxpayer's assets.

What is advisable to do

It is necessary to monitor securities portfolio movements to avoid the application of losses that the Administration may consider improper. In the event of sale operations and subsequent acquisition of homogeneous assets, the impact on the corresponding fiscal year and the possibility that such losses must be deferred to future years must be assessed, in accordance with the provisions of Law 35/2006.