filing taxes as a day trader??

[Hollyshiit]

Dear RS..
i've been trading for a yr now, n taxes r due in a few months
i would like to know wut would be my best option to minimize my taxes on my captial gains?
thx..

[goo3]

if you buy the same stock within 30 days of selling it, it's treated as income - not capital gains.

^ EDIT: Just checked this thread again.. This is wrong, don't listen to me.

[Gt-R R34]

An Accountant =)

I hate wrapping my head around the tax part.

[Slushbox]

If you trade frequently, CRA can consider your day trading proceeds to be income rather than capital gains, effectively doubling your tax obligation (relative to casual traders). An accountant who specializes in tax will be able to give you advice for your situation.

The simplest methods I know of reducing taxes are: carry forward past capital losses or buy RSPs. Prior to the year end, you could have also dumped some loser stocks at a loss to reduce your net gain or donated stocks to charity (reduce gains and get a tax credit). It takes a bit of math and planning to figure out the best option for you.

If you're in a really high tax bracket you can look into more sophisticated options like investing in RSPs that give you investment tax credits (like flow-throughs).

Things you shouldn't do are: buy back any stocks you dumped at the end of the year within 30 days of sale (deemed a superficial sale); transfer stocks at a loss into an RSP (in-kind contribution) since you cannot claim a capital loss.

[StaxBundlez]

hmm weird i was reading about this a couple days ago ..
i'll just tell you what another guy told me..
from what i've read on other forums theres a certain way to offset your expenses.. i believe its by declaring yourself as a trader to the gov.

But unfortunately it has 2 negative effects..
-its very difficult to change your "trader" status later if you decide you dont want to be a trader..
-all your long term investments will be charged higher earned income rate instead of capital gains of 25%

then you can open an incorporated company and pay all expenses to that company.
At the end of the year you can either pay yourself a salary or pay yourself a dividend.
When you pay yourself a salary or a dividend you will be taxed on that, but Canada does not have double taxation, therefor if you already paid 18% tax in the company you would owe the balance of the othe 18% when you take it personal.

i just got this from another site
thats about as far as i've read on taxes lol

*Note: this is not professional advice.. i am not a finacial planner or accountant..

[Chuck Norris]

You can claim it as capital gains provided you are employed with another company and claim salary expense.

The issue comes when the amount you are making in trading begins to outstrip your salary.

For example, if you make $100k a year and make $10k trading it is very easy to claim capital gains, I've done this myself in the past.

If you start making money the next year and it's getting bigger, CRA will notice and may step in there is no specific amount where this happens.

There is a lot of talk about his 30 day rule and I read about it way back when I took my CSC and these other tax planning courses. I have yet to see it happen with anyone that I trade with.

And the end of the year you square up your capital gains and losses and your left over amount determines your tax bill. Incorporating yourself is a huge pain in the ass and I wouldn't suggest it. Depending on how you trade you can't even set yourself up as a limited company.

Reason... if you did you could just take out a massive loan, filter money out of it, if the trade go sour, shut down the business and funnel money into your personal account and call it a day.

I hate tax. This year my trading income is a mix of capital gains dividends and income. There are ways to structure it but it's different for everyone.

I have a lawyer and a tax accountant to look after my stuff and it's worth it. If you're generating enough trading income, I suggest doing the same.

Also, there are many write offs that you can take on while trading as well but talk to a professional. Don't take anything anyone says on rev scene as law.

[pwdiero]

To determine the what type your income your have, read:
Transactions in securities NO: IT-479R
http://www.cra-arc.gc.ca/E/pub/tp/it479r/it479r-e.html

If your profit is considered business income, use the Business and Professional Income 2008 Guide to see what type of deductions you can claim
http://www.cra-arc.gc.ca/E/pub/tg/t4002/t4002-e.html


If your profit is considered capital gains, use Capital Gains - 2008 Guide to see how you can lower the amount you have to report.
http://www.cra-arc.gc.ca/E/pub/tg/t4037/t4037-e.html