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futures tax rate in Canada?
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futures tax rate in Canada?

  #11 (permalink)
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Broker workaround

Yes.
The broker that I wanted to work through at the time did not service Alberta, and I already had an active LLC in Nevada, which is owned by the parent company here. Not much more paperwork to trade through my LLC.

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  #12 (permalink)
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Just stumbled upon this: ARCHIVED - Commodity Futures and Certain Commodities

Is it just me or can most canadian futures daytraders on futures.io (formerly BMT) can be treated as "speculators", since we probably don't trade as part of an activity in a market related to that futures market. Hence, only having half of our gains being taxable?

Unless by default, if you trade indexes/financials, you cannot be considered a speculator?
=======================

INCOME TRANSACTIONS

3. For taxpayers who take futures positions in, or who have transactions in, commodities connected with their business as part of their business operations, the trading in such futures or commodities creates fully taxable profits or fully allowable losses on account of income (hereinafter called "income treatment'). For example, this includes distillers who use certain grains in their business and also take futures positions in those grains.

4. Also accorded income treatment for tax purposes are transactions in commodity futures or commodities by taxpayers who, while not carrying on a business that utilizes a particular commodity, have access to special (insider) information about the commodity which they use to their benefit in one or more such transactions. For example, a senior officer of a sugar refinery who personally enters into transactions in sugar futures or sugar is included in this category.

5. Corporate taxpayers whose prime or only business activity is trading in items to which the comments in this bulletin apply are subject to the income treatment.

SPECULATORS

6. In this bulletin, a "speculator" is a taxpayer who takes one or more futures positions or acquires a commodity other than in the circumstances described in 3, 4 and 5 above.

7. As a general rule, it is acceptable for speculators to report all their gains and losses from transactions in commodity futures or in commodities as capital gains and losses with the result that only one- half the gain is taxable, and one-half the loss is allowable subject to certain restrictions, (hereinafter called "capital treatment") provided such reporting is followed consistently from year to year.*


Last edited by JustinIsHere; February 11th, 2015 at 08:08 PM.
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  #13 (permalink)
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The following is applicable for Quebec residents:

9. Generally speaking, a capital gain or loss results from the disposition of commodity futures that are not connected with the taxpayer’s business and not acquired on a commercial basis. This may be the case, for example, where commodity futures are acquired to offset the effects of currency devaluation in order to protect the value of long-term investments or non-liquid investments.

Source: http://www2.publicationsduquebec.gouv.qc.ca/dynamicSearch/telecharge.php?type=16&file=I3A80T2R2BULB.pdf

So basically, if you trade futures and never take delivery upon contract expiration (no commercial hedging, no intention to use the commodity itself etc), then your gains are considered capital gains, so only 50% is taxable at the provincial level.

Note that the file is an interpretation, dated June 30, 2008. Ask your accountant or tax adviser to be sure.

I'm still not sure how it works for index and bonds futures though.


Last edited by JustinIsHere; February 11th, 2015 at 11:37 PM.
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  #14 (permalink)
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Reporting Foreign Income and Expenses

When foreign amounts, including income, expenses, and foreign taxes paid, are reported on your Canadian personal income tax return, they must be reported in Canadian dollars.

Investment income is reported on Schedule 4 of your tax return. If you are using a software package to do your tax return, record the information from your tax slips in the tax slips area of the return. The amounts on your tax slip may not be in Canadian dollars. If they are not, you have to convert the amounts and enter the Canadian dollar amounts into the tax return.

When you record the amounts from your tax slips using tax software, any foreign withholding tax will automatically be entered into the areas for calculating the federal and provincial foreign tax credits. The federal foreign tax credit is calculated on Schedule T2209, and at least a portion of it should reduce your taxes payable. The provincial or territorial foreign tax credit is calculated on Schedule T2036.
Converting to Canadian Dollars

The foreign exchange rate used to convert the foreign currency transaction into Canadian dollars is either
  • the rate in effect on the date of the transaction, or
  • the average annual exchange rate for the taxation year
as published by the Bank of Canada (noon rate).
2013 US Exchange Average Rate

The annual average rate for converting US dollars for 2014, as per the Bank of Canada, was 1.1044664 (1.02991480 for 2013). To convert US dollar amounts to Canadian dollars, multiply the US $ amount by 1.1044664.

Source: TaxTips.ca - Reporting foreign amounts on your Canadian personal income tax return

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  #15 (permalink)
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Superdoug3 View Post

but in response to TFSA
IB wrote me - IB Canada only support trading in a Cash or Margin account for trading EFT, Futures, Futures Options and more, without the Tax Free saving features

I just got a message yesterday from Interactive Brokers that TFSA and RSA accounts are now available. So that's a pretty good news for Canadians. Too bad we can't trade futures within TFSA.


Last edited by boxi; February 24th, 2015 at 07:52 PM. Reason: Options are allowed under TFSA
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  #16 (permalink)
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JustinIsHere View Post
Just stumbled upon this: ARCHIVED - Commodity Futures and Certain Commodities

Is it just me or can most canadian futures daytraders on futures.io (formerly BMT) can be treated as "speculators", since we probably don't trade as part of an activity in a market related to that futures market. Hence, only having half of our gains being taxable?

Unless by default, if you trade indexes/financials, you cannot be considered a speculator?

Yes, only half of capital gains are taxed in Canada.

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  #17 (permalink)
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boxi View Post
I just got a message yesterday from Interactive Brokers that TFSA and RSA accounts are now available. So that's a pretty good news for Canadians. Too bad we can't trade futures and options within TFSA.

Yes, wouldn't that be great. I would be happy for a Federal Security Regulator, instead of each province fighting over what to regulate. I live in B.C., so BC does not allow me to use US discount brokerages. I am lucky to be grandfathered into Transact, but others are not so lucky.

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  #18 (permalink)
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You can have an account with IB Canada.

It is hard to find the Truth when you start your search with a preconceived notion of what the Truth will be.
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  #19 (permalink)
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boxi View Post
I just got a message yesterday from Interactive Brokers that TFSA and RSA accounts are now available. So that's a pretty good news for Canadians. Too bad we can't trade futures within TFSA.

And RRSP accounts as well, from their Canadian FAQ!

"IB offers RRSP; including Spousal RRSP, and TFSA accounts. "

This is HUGE for being able to set up Ninjatrader robotics using ETF proxies for futures, within a registered account.

You may need to use the futures price action for signals, but trade the ETF. If you load an ETF proxy and the futures on the same chart, different axes, they can look almost identical, at least on the moves, if not the detailed price action. ETF are of course filtered, and the filtering may or may not be helpful for a strategy.

The number of people who have liquid cash tied up in RSPs is huge compared to having money in TFSAs or unregistered.

IB appears to still suggests that daytraders need a 25k minimum on the Canadian FAQ??

Any other Canadians using Ninjatrader with Canadian IB? Is there any problem using Ninjatrader robotics on a Canadian account, a registered account?

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  #20 (permalink)
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Clever idea using ETF to trade Futures on TFSA or RRSP
I remember receiving a note from IB Canada saying that the $25k restriction on day trading was removed because this is a US requirement and IB Canada had set it up so that Canadians no longer needed the $25k restriction. But I haven't traded with IB. Just use the IB - Account Management / Tickets to set up a ticket and pose this question. I would be interested in the response

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