holding profit in linked account

[jer91]

Hello everyone I'm from Canada and started trading stocks and options a while ago.I want to be tax efficient and have a couple of questions:

I have 2 LINKED accounts under the SAME user in Interactive brokers. the first account is the one I've funded first and I'm using for day trading. The second account is to hold profits from stock and options in. I just want to put the profits earned on the first account on side as monthly income and once a month withdraw it to my bank. The transfers between both account in IB are internal.

1.Would cash internal transferring between account it effect my tax paid on it?

2.Is transferring profits to the second account and holding it there will change the actuall income on reports?

3.Would I get one T5 for both account or separate for each account?

4.Does profit from buying\selling (not exercising them) stock options and capital gain from stocks taxed the same way?

5.When I trade US stocks and options do I need to convert my CAD funds to USD to be enough to buy the stock\option or it Does that automatically? ive noticed at cash totals the my CAD amount stays the same while the USD goes negative when I trade and hold positions.


Thanks in advance

 

[ajacobson]

Every account same tax id and domicile - including the bank account you're going to transfer too? Ask all involved about AML issues. It simply looks unnecessarily cumbersome, but that the kind of thing that may set off an inquiry.

 

[jer91]

Every account same tax id and domicile - including the bank account you're going to transfer too? Ask all involved about AML issues. It simply looks unnecessarily cumbersome, but that the kind of thing that may set off an inquiry.

yes used only by me and same bank account

 

[HobbyTrading]

5.When I trade US stocks and options do I need to convert my CAD funds to USD to be enough to buy the stock\option or it Does that automatically? ive noticed at cash totals the my CAD amount stays the same while the USD goes negative when I trade and hold positions.

No, it will not be done automatically. Your IB account is a multi-currency account. This means that you can have a positive CAD cash position while at the same time have a negative USD cash position. Also, IB will determine for each currency separately whether you will receive credit interest or whether you will be charged debit interest. If you want to avoid having a negative cash position in a currency you have to manually place a forex order. Each forex transaction has a commission. So it might be cheapest if you wait until you have completed all your transactions and only then place the forex transaction for the total amount you want to convert.

 

[FrankInLa]

What you are doing is gonna raise red flags with tax authorities. Tax man cares about the individual positions and holding periods. An audit will cause issues if you allocate realized pnl from short term positions and mask it as long term gains.

Hello everyone I'm from Canada and started trading stocks and options a while ago.I want to be tax efficient and have a couple of questions:

I have 2 LINKED accounts under the SAME user in Interactive brokers. the first account is the one I've funded first and I'm using for day trading. The second account is to hold profits from stock and options in. I just want to put the profits earned on the first account on side as monthly income and once a month withdraw it to my bank. The transfers between both account in IB are internal.

1.Would cash internal transferring between account it effect my tax paid on it?

2.Is transferring profits to the second account and holding it there will change the actuall income on reports?

3.Would I get one T5 for both account or separate for each account?

4.Does profit from buying\selling (not exercising them) stock options and capital gain from stocks taxed the same way?

5.When I trade US stocks and options do I need to convert my CAD funds to USD to be enough to buy the stock\option or it Does that automatically? ive noticed at cash totals the my CAD amount stays the same while the USD goes negative when I trade and hold positions.


Thanks in advance