Wallace and OP,
From the same site, here's the site's Tax Guy reply to a Canadian day trader's question:
Follow-Up Question: Thanks very much for the reply. Your website is great and has lot of helpful information.
One quick follow-up question: Does the same rule apply to day-trading?
Looking at the result of each sell transaction will be very difficult if someone is doing day trading in one stock. Many times there could be multiple buys and sells on the same day and hundreds of transactions in a tax year.
You have an option to make an election to treat all of your trading in securities as either capital or income related transactions. In other words you may elect to have all of your trading considered either capital gains or losses or as income transactions.
If you elect capital gains treatment, you are better off for capital gains since the tax is ½ the normal rate. Losses (non-superficial) are applied to gains and can be carried forward back three years and forward indefinitely and can be only used against capital gains.
With the income election your gains and losses are not considered capital. In this case 100% of the gain is included in income and taxed at the full rate. Losses are losses and you may have other deductions available since you will be considered to operating a business.
http://blog.taxresource.ca/superficial-losses-gains-loss-on-identical-properties/
From the same site, here's the site's Tax Guy reply to a Canadian day trader's question:
Follow-Up Question: Thanks very much for the reply. Your website is great and has lot of helpful information.
One quick follow-up question: Does the same rule apply to day-trading?
Looking at the result of each sell transaction will be very difficult if someone is doing day trading in one stock. Many times there could be multiple buys and sells on the same day and hundreds of transactions in a tax year.
You have an option to make an election to treat all of your trading in securities as either capital or income related transactions. In other words you may elect to have all of your trading considered either capital gains or losses or as income transactions.
If you elect capital gains treatment, you are better off for capital gains since the tax is ½ the normal rate. Losses (non-superficial) are applied to gains and can be carried forward back three years and forward indefinitely and can be only used against capital gains.
With the income election your gains and losses are not considered capital. In this case 100% of the gain is included in income and taxed at the full rate. Losses are losses and you may have other deductions available since you will be considered to operating a business.
http://blog.taxresource.ca/superficial-losses-gains-loss-on-identical-properties/
