I was curious for the Canadian traders out there. How do you go about tracking your P&L for tax purposes. Is there a particular piece of software you use? Do you just use Excel? 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.
Don't have an answer but was curious as to where you found info on the second part. I researched it myself awhile back and couldn't find anything concrete. I found some articles about the cra trying to fight trading in tfsa. But it's a hard thing to fight I'd think. First off if someone is able to trade up a tfsa congrats to them. Think a current deposit cap is like 45k right now? Your not allowed a margin account so theirs a handicap vs a regular account in my mind. 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.
http://www.theglobeandmail.com/glob...p-your-tax-hands-off-my-tfsa/article22922076/ If you just do a search for "tfsa day trading cra" you will find a plethora of articles. Here's one: http://www.theglobeandmail.com/glob...p-your-tax-hands-off-my-tfsa/article22922076/
I'm not sure if this is true, haven't looked into it myself, but you can always trade the leveraged ETFs. These move quite well in my mind for a swing trader with a hold of several days or even day trading, be they the ones based on precious metals or energy. As for the stance of the CRA, I don't think there was anything ever published officially by them. There were some news articles of people getting harassed by the CRA, so they voluntarily paid taxes, but I think if any of these cases ever went to court, I don't see how the trader could lose when there really aren't any guidelines about holding times and such. A couple of years back there was an article about a guy who had over 300k in his TFSA from getting in on FNMA when it shot up, even though it was a pink slip security which he shouldn't have been able to trade in his account. What ended up happening was that he was actually able to trade it because of some loophole with regards to the exchange he actually traded it on or something like this so it ended up being legit. Actually, now that I think about it, the only case where someone was in actual trouble wasn't just because of the TFSA. It was because he took a position in something highly illiquid in his TFSA account, and then made other trades in his regular account to push the market in a certain direction causing his security in the TFSA to rise that he would then sell for profit. I don't remember the exact details, but it was pretty clever in that the gains were now realized tax free, even though it was a bit of manipulation, and he was perhaps even able to claim a loss in the regular account. So the issue wasn't exactly with regards to TFSA, but rather something of an SEC type violation (or whatever the equivalent Canadian agency is).
I use Tax FRWY, Mac, for filing, with no problems. It looks identical to the printed forms from the CRA. The pic below is the header of a sheet done in Numbers (Mac version of Excel). I log after every transaction and it automatically updates running totals. It's copied from the CRA tax form. I've been using this since the 05 tax year, part time, last 3 full time swing trading, no issues from the CRA. Just enter the totals on the appropriate line, print out your accumulated data, attach, and snail mail it in. This is not an apology, but I'm old school when it comes to e-file tax.
I'm not referring to the actual tax program. I'm referring to keeping track of the trades come tax time I can "print out the accumulated amounts".
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. 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. 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?)