Offsetting losses (compensação de prejuízos)

Losing money is part of investing — and Brazilian tax law lets you use realised losses to reduce the tax on future gains. This is compensação de prejuízos, and forgetting to use it means paying tax you did not have to. The mechanics below reflect the rules at the time of writing; verify them.

How it works

When you close a month with a net loss in a given modality, that loss is carried forward and can be subtracted from future net gains in the same modality, with no time limit (it does not expire), until fully used.

The unbreakable rule: same modality only

Losses can only offset gains of the same kind:

• Swing-trade losses offset only swing-trade gains.
• Day-trade losses offset only day-trade gains.
• You generally cannot offset stock losses against FII gains, and vice versa (FIIs have their own separate pool — see their lesson).

A worked example

January : day-trade net result = −R$2,000 (loss carried forward)
February: day-trade net gain   = +R$5,000
          taxable gain = 5,000 − 2,000 = R$3,000
          IR (20%)     = 3,000 × 0.20 = R$600
          (without the carry-forward you'd have paid 5,000 × 0.20 = R$1,000)

The carried loss saved you R$400.

Where it is tracked

You keep this running balance yourself — in a spreadsheet, your broker's tax report, or software. Each year it is also reported on the annual declaration so the Receita sees the accumulated loss you are carrying. If you stop reporting the loss, you can lose the right to use it. Keep meticulous records, and have your accountant confirm the carry-forward each year. Educational only.