Comments on: How Investing Taxes Work (Part 1 – Capital Gains) http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm Building Wealth through Saving and Investing Sun, 21 Mar 2010 05:04:40 -0400 http://wordpress.org/?v=abc hourly 1 By: Xtrykr http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm/comment-page-2#comment-111548 Xtrykr Sat, 13 Mar 2010 04:08:21 +0000 http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm#comment-111548 I actually have one more question, do I have to fill out a Schedule 3 for EACH stock I have traded, and disposed of, resulting in a gain/loss? (I saw the Schedule 3 form, it only has one line for one company!). I have traded about 15 different companies, do I have to fill out a schedule 3 for each of these? Or can I just staple my spreadsheet with my ACB and capital gain/loss calculations to it and tell them to refer to it? Thanks!!! I actually have one more question, do I have to fill out a Schedule 3 for EACH stock I have traded, and disposed of, resulting in a gain/loss? (I saw the Schedule 3 form, it only has one line for one company!). I have traded about 15 different companies, do I have to fill out a schedule 3 for each of these? Or can I just staple my spreadsheet with my ACB and capital gain/loss calculations to it and tell them to refer to it? Thanks!!!

]]> By: Xtrykr http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm/comment-page-2#comment-111534 Xtrykr Fri, 12 Mar 2010 05:13:10 +0000 http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm#comment-111534 Hi FrugalTrader, say I have the following scenario: Aug 20 Bough 40 shares of A for $100 Aug 24 Bought 20 shares of A for $50 Sep 01 Bought 20 shares of A for $50 Sep 10 Sold 80 shares of A for $150 Sep 14 Bought 30 shares of A for $50 Sep 23 Bought 20 shares of A for $75 Sep 30 Bought 20 shares of A for $75 Oct 01 Sold 70 shares of A for $150 Oct 08 Bought 40 shares of A for $100 Oct 16 Sold 40 shares of A for $150 How do I interpret this? Do I work it out as: 1) cap loss $50 from Sep 10 Sale plus cap loss $50 from Oct 01 Sale = $100 cap loss against $50 cap gain from Oct 16 sale, which is net cap loss of $50? OR 2) Cap loss $50 from Oct 01 Sale against $50 Cap gain from Oct 16 sale, which is net zero? (due to repurchase of stock within 30 days?) The problem I'm running into is I have several stocks in my portfolio that I day traded (I'm not a professional day trader, was rolling the dice on a couple of my picks). I have completed a series of about 20 trades with a particular stock over the span of 3 months. Based on the rule, I have many superficial losses on some of my picks, and as a result, would like to know how to interpret this in my scenario. Thanks in advance! Hi FrugalTrader, say I have the following scenario:

Aug 20 Bough 40 shares of A for $100
Aug 24 Bought 20 shares of A for $50
Sep 01 Bought 20 shares of A for $50
Sep 10 Sold 80 shares of A for $150
Sep 14 Bought 30 shares of A for $50
Sep 23 Bought 20 shares of A for $75
Sep 30 Bought 20 shares of A for $75
Oct 01 Sold 70 shares of A for $150
Oct 08 Bought 40 shares of A for $100
Oct 16 Sold 40 shares of A for $150

How do I interpret this? Do I work it out as:

1) cap loss $50 from Sep 10 Sale plus cap loss $50 from Oct 01 Sale = $100 cap loss against $50 cap gain from Oct 16 sale, which is net cap loss of $50?

OR

2) Cap loss $50 from Oct 01 Sale against $50 Cap gain from Oct 16 sale, which is net zero? (due to repurchase of stock within 30 days?)

The problem I’m running into is I have several stocks in my portfolio that I day traded (I’m not a professional day trader, was rolling the dice on a couple of my picks). I have completed a series of about 20 trades with a particular stock over the span of 3 months. Based on the rule, I have many superficial losses on some of my picks, and as a result, would like to know how to interpret this in my scenario. Thanks in advance!

]]> By: FrugalTrader http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm/comment-page-2#comment-111420 FrugalTrader Mon, 08 Mar 2010 18:51:16 +0000 http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm#comment-111420 Peter, from my understanding, you are responsible for tracking your own buy/sells, there for your capital gains/losses. Most brokerages can provide a summary of your trading activity for the year. Peter, from my understanding, you are responsible for tracking your own buy/sells, there for your capital gains/losses. Most brokerages can provide a summary of your trading activity for the year.

]]> By: Peter http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm/comment-page-2#comment-111418 Peter Mon, 08 Mar 2010 16:28:50 +0000 http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm#comment-111418 Silly question- does your broker send you forms indicating your capital gains? Silly question- does your broker send you forms indicating your capital gains?

]]> By: lorca http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm/comment-page-2#comment-110993 lorca Sat, 20 Feb 2010 02:03:51 +0000 http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm#comment-110993 Hi FT, Great article! I'm new to investing and am trying to be more tax efficient. I've maxed out my TFSA but my spouse has $10 000 unused contribution room. I would like to sell $10 000 worth of equity mutual funds in my non-reg account at a loss to offset some gains and repurchase the same funds at the same time (as I believe that they will rebound and potentially do well in the future) in my spouse's TFSA to shelter future capital gains. Does the superficial loss rule apply to repurchasing within 30 days under a spouse's account? Thanks Hi FT,

Great article! I’m new to investing and am trying to be more tax efficient.

I’ve maxed out my TFSA but my spouse has $10 000 unused contribution room. I would like to sell $10 000 worth of equity mutual funds in my non-reg account at a loss to offset some gains and repurchase the same funds at the same time (as I believe that they will rebound and potentially do well in the future) in my spouse’s TFSA to shelter future capital gains.

Does the superficial loss rule apply to repurchasing within 30 days under a spouse’s account?

Thanks

]]> By: Thicken My Wallet » Blog Archive » The 2 largest external factors eroding your net worth http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm/comment-page-2#comment-109519 Thicken My Wallet » Blog Archive » The 2 largest external factors eroding your net worth Wed, 13 Jan 2010 08:47:53 +0000 http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm#comment-109519 [...] are already many wonderful summaries of the tax consequences of each type of investment. Suffice to say, the general rule is this: low risk, low upside investments (think high interest [...]

[...] are already many wonderful summaries of the tax consequences of each type of investment. Suffice to say, the general rule is this: low risk, low upside investments (think high interest [...]

]]> By: Year End Tax Tips: 2009 | Finance Blog http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm/comment-page-2#comment-109160 Year End Tax Tips: 2009 | Finance Blog Wed, 06 Jan 2010 09:26:25 +0000 http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm#comment-109160 [...] your gains, thus reducing your taxable amount.  Capital losses can also be carried back against capital gains accrued in the previous 3 years and carried forward indefinitely.  Make sure you do this by [...]

[...] your gains, thus reducing your taxable amount.  Capital losses can also be carried back against capital gains accrued in the previous 3 years and carried forward indefinitely.  Make sure you do this by [...]

]]> By: How to Avoid or Reduce Bank Fees | Finance Blog http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm/comment-page-2#comment-109154 How to Avoid or Reduce Bank Fees | Finance Blog Wed, 06 Jan 2010 09:24:49 +0000 http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm#comment-109154 [...] How capital Gains Tax Works [...]

[...] How capital Gains Tax Works [...]

]]> By: How an Average Canadian Woman Became Financially Independent | Million Dollar Journey http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm/comment-page-2#comment-109095 How an Average Canadian Woman Became Financially Independent | Million Dollar Journey Tue, 05 Jan 2010 19:51:44 +0000 http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm#comment-109095 [...] What vehicles I use to create positive cash flow as well as capital gains. [...]

[...] What vehicles I use to create positive cash flow as well as capital gains. [...]

]]> By: cashback cards http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm/comment-page-2#comment-108767 cashback cards Wed, 23 Dec 2009 15:58:26 +0000 http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm#comment-108767 Is it always going to be right at 50%, and/or is that strictly Canada? Just wondering. Great information though! Really makes you think about where you to put your money and how to make it really work for you and not the gov't. Is it always going to be right at 50%, and/or is that strictly Canada? Just wondering.

Great information though! Really makes you think about where you to put your money and how to make it really work for you and not the gov’t.

]]> By: FrugalTrader http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm/comment-page-2#comment-108751 FrugalTrader Wed, 23 Dec 2009 12:28:15 +0000 http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm#comment-108751 Annette, the $750k cap gains exemption is for owners of ccpcs (Canadian controlled private coporations) when they sell their shares. It does not apply to investors who purchase public shares. There's not a lot you can do to avoid the capital gains other than selling your losing stocks to claim the capital losses against your gains. As well, if you haven't maxed out your RRSP, contributing will help reduce your tax burden. Annette, the $750k cap gains exemption is for owners of ccpcs (Canadian controlled private coporations) when they sell their shares. It does not apply to investors who purchase public shares.

There’s not a lot you can do to avoid the capital gains other than selling your losing stocks to claim the capital losses against your gains. As well, if you haven’t maxed out your RRSP, contributing will help reduce your tax burden.

]]> By: Annette http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm/comment-page-2#comment-108744 Annette Wed, 23 Dec 2009 02:26:54 +0000 http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm#comment-108744 I am looking at the possibility of cashing out some stocks for the sole purpose of re-purchasing and investing them held in my TFSA. I understand that I will take a hit of about 20% of the capital gains of the stocks( or 40 percent of half of the capital gains earned) if I am in the highest tax rate. Is there any way that I can avoid this? Is there any way that this could apply to the 750,000,000 personal tax exemption for capital gains in Canada? What would you advise? Thanks I am looking at the possibility of cashing out some stocks for the sole purpose of re-purchasing and investing them held in my TFSA. I understand that I will take a hit of about 20% of the capital gains of the stocks( or 40 percent of half of the capital gains earned) if I am in the highest tax rate. Is there any way that I can avoid this? Is there any way that this could apply to the 750,000,000 personal tax exemption for capital gains in Canada? What would you advise? Thanks

]]> By: F A http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm/comment-page-2#comment-107878 F A Fri, 04 Dec 2009 00:19:21 +0000 http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm#comment-107878 ...and to add on: I am a full-time trader, hence my gains from futures trading is my ONLY source of income. Thanks F. …and to add on:

I am a full-time trader, hence my gains from futures trading is my ONLY source of income.

Thanks

F.

]]> By: F A http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm/comment-page-2#comment-107875 F A Thu, 03 Dec 2009 23:58:48 +0000 http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm#comment-107875 Hi everyone, I am a futures (eminis, etc) day trader in Canada. Can someone tell me or direct me to an appropriate link where I can find how gains from futures trading is taxed? I am under the impression that futures trading gains are taxed as Capital Gains. Please feel free to provide your comments and share your knowledge. Thank you. F. Hi everyone,

I am a futures (eminis, etc) day trader in Canada. Can someone tell me or direct me to an appropriate link where I can find how gains from futures trading is taxed? I am under the impression that futures trading gains are taxed as Capital Gains. Please feel free to provide your comments and share your knowledge.

Thank you.

F.

]]> By: Paul http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm/comment-page-2#comment-107107 Paul Wed, 11 Nov 2009 19:23:21 +0000 http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm#comment-107107 One follow up question, is it okay for me to assume that platform fees paid will be deducted for tax purposes in non registered, non business account? One follow up question, is it okay for me to assume that platform fees paid will be deducted for tax purposes in non registered, non business account?

]]> By: FrugalTrader http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm/comment-page-2#comment-107075 FrugalTrader Tue, 10 Nov 2009 19:23:36 +0000 http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm#comment-107075 paul, investing fees should be paid outside an RRSP. The reason being is that RRSP contribution room is limited, so might as well use non-rrsp dollars to pay expenses. paul, investing fees should be paid outside an RRSP. The reason being is that RRSP contribution room is limited, so might as well use non-rrsp dollars to pay expenses.

]]> By: paul http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm/comment-page-2#comment-107074 paul Tue, 10 Nov 2009 19:17:11 +0000 http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm#comment-107074 Hi guys, I am about to sign up for a questrade platform. But could not decide if i want it to pay for my platform fee from within the rrsp account or non rrsp. is that fee deductable. Thanks Hi guys,

I am about to sign up for a questrade platform. But could not decide if i want it to pay for my platform fee from within the rrsp account or non rrsp. is that fee deductable.

Thanks

]]> By: FrugalTrader http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm/comment-page-2#comment-94113 FrugalTrader Mon, 27 Jul 2009 15:54:10 +0000 http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm#comment-94113 I know that XDV can be under a synthetic DRIP with any discount brokerage (ability to buy at least 1 share/distribution, otherwise distributed as cash). However, I don't think you can drip directly from ishares. I know that XDV can be under a synthetic DRIP with any discount brokerage (ability to buy at least 1 share/distribution, otherwise distributed as cash). However, I don’t think you can drip directly from ishares.

]]> By: invetor http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm/comment-page-2#comment-94108 invetor Mon, 27 Jul 2009 15:01:15 +0000 http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm#comment-94108 Great information. I have a few questions need to be clarified. I am going to buy etf XDV through sharewoner. I know there is ROC. Is XDV good for Drip Thanks Great information.
I have a few questions need to be clarified.
I am going to buy etf XDV through sharewoner. I know there is ROC.
Is XDV good for Drip

Thanks

]]> By: FrugalTrader http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm/comment-page-2#comment-94107 FrugalTrader Mon, 27 Jul 2009 14:57:05 +0000 http://www.milliondollarjourney.com/how-investing-taxes-work-part-1.htm#comment-94107 invetor, here is a detailed explanation of <a href="http://www.milliondollarjourney.com/how-return-of-capital-works.htm" rel="nofollow">how return of capital works</a>. invetor, here is a detailed explanation of how return of capital works.

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