How do you go about tracking your P&L for tax purposes.
I only have one brokerage account right now, at I.B., so I just use their reports. They file profits and dividends with the CRA, so I just file the same amounts on my end.
Also, has anyone had any experience trading inside their TFSA? I've done some research and it seems that CRA does not allow this and will disallow any tax benefits from it.
The main cases where the CRA went back on its own law for TFSA's was when there were some very weird account transfer rules abuse that allowed people insane amounts of arbitrage benefit, and the occasional non-approved investment types. Otherwise, there are mainly two points to consider:
1. What's your primary source of income and how do you present yourself professionally? If you're a financial analyst or tell everyone you're primarily a "trader", it's likely that gains in your TFSA will be treated as professional income as you used your "specialized knowledge and information" to make those investment decisions. And by primary source of income, I don't mean dollars but hours spent. If you're retired (and do mainly other things) or do something not related to finance, then it's easier to label yourself as a "retail" non-professional who just does well (hopefully), researches on the weekends, etc. The annoying part of course is that even if you're deemed "professional" because you invest too much time or trade too frequently, and thus pay taxes on those "tax-free" gains, when you incur a loss you
cannot deduct it from other income, because hey it's a tax-free account... I think that unfair one-way aspect, even though it's not written in the law, is the main threat the CRA is using to deter from straying from the
intent, which is just for people to save a bit more, nothing fancy.
2. A big part of intent is seen as duration, and that's usually (but not explicitly written as) 30 days. If your average position is held more than 30 days, you should more easily be an "investor". If your average position is hours or a few days, you'll almost certainly be classified as a professional trader and pay taxes on the profits.
The majority of traders will lose and the tfsa account would not allow to claim losses yet they'd like to attack the few who do make profits.
Mostly million-dollar cases. The smallest gains I've seen being questioned by the CRA were 1000% and much more. Unless new publicized cases came up in the second half of 2015 I'm not aware of... I've seen mentions that basically any gains better than inflation are carefully reviewed, but I haven't seen them materialize that threat. (Yet?)
