futures tax rate in Canada? - Traders Hideout | futures io social day trading
futures io futures trading


futures tax rate in Canada?
Updated: Views / Replies:6,654 / 29
Created: by strike333 Attachments:0

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors – all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you don’t need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 
Thread Tools Search this Thread
 

futures tax rate in Canada?

  #21 (permalink)
Elite Member
Toronto, Canada
 
Futures Experience: Intermediate
Platform: AmiBroker, NinjaTrader
Favorite Futures: Futures
 
Posts: 54 since Mar 2010
Thanks: 197 given, 40 received


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

I'm looking deeper into it and it looks like the day traders don't get the 50% capital gains benefit. More in the link:
TaxTips.ca - Tax treatment of investments - capital or income?

Reply With Quote
 
  #22 (permalink)
Elite Member
Toronto, Canada
 
Futures Experience: Intermediate
Platform: AmiBroker, NinjaTrader
Favorite Futures: Futures
 
Posts: 54 since Mar 2010
Thanks: 197 given, 40 received


JustinIsHere View Post
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.

These articles talk about commodity futures, so if you are trading CL maybe it applies. But does if apply when trading ES, NQ or index futures?

Also, in my previous post I posted a link about the day traders, so the capital gain may not apply.

All this is not clear to me, a lot depends on interpretation. If somebody has some definite rules for taxes on Futures trading and capital gain post it here.

Reply With Quote
 
  #23 (permalink)
Elite Member
Luxembourg, Luxembourg
 
Futures Experience: Advanced
Platform: TWS
Broker/Data: Interactive Brokers
Favorite Futures: Stocks
 
Posts: 491 since May 2012
Thanks: 1,641 given, 1,126 received


Not an expert in Canadian tax, but am an expert in South African tax which typically refers to UK case law. Due to the link between Canada and UK, I am assuming that the Canadian tax law draws heavily from the UK tax law.

If that is the case, then the following applies:
1. If you apply a lot of your time to the buying and selling of futures, then it will most likely be considered your business and be taxed as income. The typical case law in the UK stated that betting on horses is a capital gain, but developing a system to bet on horses transforms that into income.

2. The Guidelines for Quebec in the above link state the following: "8. However, none of the above-mentioned factors is itself determinative. All of the facts and circumstances surrounding the transactions must be considered." This means that each case will be considered individually on its own merits. That is done intentionally so that the tax authorities are not boxed in. The guidelines seem to apply more to business who wish to hedge a certain risk.

Based on the above, day-traders and swing traders will have their income taxed as income and not capital gains. In the UK and South Africa that would definitely be the case.

Based just on the Guidelines, even longer term traders my find that their income is taxed as income. This is where paragraph 8 quoted above may come into play.

Commodities and index futures will generally also be treated the same since the underlying principle is whether or not you are trading as a business or not.

Now all of this could be entirely wrong and your best bet would be to talk to a CA friend if you have one. Other option would be to consult with a tax advisor. However, my gut feeling says it will be income.

Reply With Quote
The following user says Thank You to grausch for this post:
 
  #24 (permalink)
Membership Temporarily Revoked
Calgary Alberta/Canada
 
Futures Experience: Advanced
Platform: TDWaterhouse
Favorite Futures: stocks (long term)
 
Posts: 934 since Feb 2014
Thanks: 180 given, 777 received


trendisyourfriend View Post
That's correct. Day trading is considered the same as if you were being an autonomous worker or independent contractor. However, if you trade the stock markets within a TFSA (tax free savings account) then it is different. A TFSA is a registered account that allows you to earn capital gains and dividends tax free. Your contributions are not tax-deductible, but you won’t be taxed or penalized for any gains even when you withdraw them. If you let your money sit idle in a low-interest TFSA, your gains will be minimal, meaning there’s not much tax free about it. However, if you pro-actively invest your money and your gains are more significant, then the TFSA is actually working.

This is changing a bit according to this article

Canadians with too many wins in their TFSA are being targetted by CRA | Financial Post

It looks like CRA is being watchful about individuals that make a lot of money in their TFSA. When I say a lot of money it seems that they are talking about several 6 figures and growing. They are being forced to pay taxes on this money gain.

I have been quite successful in my own TFSA having doubled it in the last 5 years but my stocks are held for minimum of 3-6 months and are high paying dividend stocks. So I think I won't attract attention but seeing this article is worrisome.

The TFSA is the only thing that the Harper government has introduced that I like. But speculators that abuse this product scare me sometimes.

Reply With Quote
The following user says Thank You to Underexposed for this post:
 
  #25 (permalink)
Elite Member
Montreal, Canada
 
Futures Experience: Beginner
Platform: NinjaTrader, Multicharts
Favorite Futures: ES
 
Posts: 96 since Dec 2011
Thanks: 46 given, 84 received


Underexposed View Post
This is changing a bit according to this article

Canadians with too many wins in their TFSA are being targetted by CRA | Financial Post

It looks like CRA is being watchful about individuals that make a lot of money in their TFSA. When I say a lot of money it seems that they are talking about several 6 figures and growing. They are being forced to pay taxes on this money gain.

I have been quite successful in my own TFSA having doubled it in the last 5 years but my stocks are held for minimum of 3-6 months and are high paying dividend stocks. So I think I won't attract attention but seeing this article is worrisome.

The TFSA is the only thing that the Harper government has introduced that I like. But speculators that abuse this product scare me sometimes.

The guy who got caught was an investment advisor and was expecting to not get flagged as a professional trader? SMH. That's cocky.

Reply With Quote
The following user says Thank You to JustinIsHere for this post:
 
  #26 (permalink)
Elite Member
Quebec
 
Futures Experience: Intermediate
Platform: NinjaTrader wt Rancho Dinero's profiling tools
Broker/Data: Stage 5 trading/AMP/CQG
Favorite Futures: ES, NQ, YM
 
trendisyourfriend's Avatar
 
Posts: 3,698 since Oct 2009
Thanks: 3,041 given, 4,498 received

Harper is thinking about increasing the max contribution to our TFSA to 11000$/year if i remember. That's a terrific vehicle for us, beeing able to make money without beeing taxed. I can't complain. Obviously, it is not for day traders but perfect for swing trading. Thanks for the link.

Reply With Quote
 
  #27 (permalink)
Elite Member
vancouver British Columbia/Canada
 
Futures Experience: Intermediate
Platform: Ninja Trader
Favorite Futures: CL
 
Posts: 82 since Jan 2013
Thanks: 1,119 given, 243 received

Apologies for a question that is off topic but I haven't seen any threads closer to my needs. I am Canadian and have just started trading futures live. I am curious if anyone knows of a simple way to track trades for accounting purposes. I run a business and asked my accountant about it and she said I need to track every trade and also do some calculations on exchange rate daily (as I fund in Canadian dollars but through IB trade in US dollars). She said it is quite extensive which has caused me some grief. I am making 3-10 trades a day for a few contracts each so not a ton but I don't really want to have to go thru and enter each into a spread sheet every single day.
Any thoughts or solutions would be appreciated.

Reply With Quote
 
  #28 (permalink)
Elite Member
Prince George BC Canada
 
Futures Experience: Advanced
Platform: IBs TWS
Broker/Data: IB
Favorite Futures: Stocks
 
deaddog's Avatar
 
Posts: 591 since May 2013
Thanks: 97 given, 643 received


Blue Eagle View Post
Apologies for a question that is off topic but I haven't seen any threads closer to my needs. I am Canadian and have just started trading futures live. I am curious if anyone knows of a simple way to track trades for accounting purposes. I run a business and asked my accountant about it and she said I need to track every trade and also do some calculations on exchange rate daily (as I fund in Canadian dollars but through IB trade in US dollars). She said it is quite extensive which has caused me some grief. I am making 3-10 trades a day for a few contracts each so not a ton but I don't really want to have to go thru and enter each into a spread sheet every single day.
Any thoughts or solutions would be appreciated.

A simple spreadsheet should suffice.

As far as exchange rates: CRA will be OK with a monthly average rate or even a yearly average rate as long as you use the same method each year.

It is hard to find the Truth when you start your search with a preconceived notion of what the Truth will be.
Reply With Quote
 
  #29 (permalink)
Elite Member
vancouver British Columbia/Canada
 
Futures Experience: Intermediate
Platform: Ninja Trader
Favorite Futures: CL
 
Posts: 82 since Jan 2013
Thanks: 1,119 given, 243 received


deaddog View Post
A simple spreadsheet should suffice.

As far as exchange rates: CRA will be OK with a monthly average rate or even a yearly average rate as long as you use the same method each year.

And this is a method you have used with CRA? How many years, if I can ask? They have never had any concerns?
And lastly, do you use an accountant or do it yourself...ie does a tax professional agree with this method?
Sorry for the further questions but want to get it right from the start as I have had big time CRA issues before.
Thank you for any further info you may have....

Reply With Quote
 
  #30 (permalink)
Elite Member
Prince George BC Canada
 
Futures Experience: Advanced
Platform: IBs TWS
Broker/Data: IB
Favorite Futures: Stocks
 
deaddog's Avatar
 
Posts: 591 since May 2013
Thanks: 97 given, 643 received



Blue Eagle View Post
And this is a method you have used with CRA? How many years, if I can ask? They have never had any concerns?
And lastly, do you use an accountant or do it yourself...ie does a tax professional agree with this method?
Sorry for the further questions but want to get it right from the start as I have had big time CRA issues before.
Thank you for any further info you may have....

I use the monthly average from the Bank of Canada web site. Have been doing this for last 20 some odd years. Ever since IB opened shop in Canada.

I do my own taxes. I have not been audited but have been re-assessed on several occasions for missed T slip info.

I keep a very detailed paper trail on all my trades. I have a spreadsheet that has all my trading info that I cross check with whatever T slips I get from my various brokers.

Somewhere on the CRA web site they give the options for reporting exchange. If your accountant doesn't know the rules you should maybe change accountants.

I no longer day trade futures or stocks. I now trade long term, stocks only, and spend maybe 10 minutes a day manageing my portfolio.

It is hard to find the Truth when you start your search with a preconceived notion of what the Truth will be.
Reply With Quote
The following user says Thank You to deaddog for this post:

Reply



futures io > > > futures tax rate in Canada?

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

Jigsaw Trading: TBA

Elite only

FuturesTrader71: TBA

Elite only

NinjaTrader: TBA

Jan 18

RandBots: TBA

Jan 23

GFF Brokers & CME Group: Futures & Bitcoin

Elite only

Adam Grimes: TBA

Elite only

Ran Aroussi: TBA

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
Good Futures Brokerage in Canada? olobay Reviews of Brokers and Data Feeds 50 May 23rd, 2017 12:26 PM
U.S. corporate tax rate poised to become highest kbit News and Current Events 0 March 27th, 2012 04:32 PM
Think Your Tax Rate Is Too High? Try Paying 102% Quick Summary News and Current Events 0 February 4th, 2012 10:20 AM
EU calls for global tax, Canada says can block it kbit News and Current Events 0 October 6th, 2011 11:43 AM
Get Ready for a 70% Marginal Tax Rate kbit News and Current Events 0 July 18th, 2011 09:05 PM


All times are GMT -4. The time now is 08:58 PM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2017-12-16 in 0.18 seconds with 39 queries on phoenix via your IP 54.160.245.121