RE:How to Lose by Winning:CRA targets most successful TFSA inv.Yes if you run your trading as a business and not investments... ie day trading, giving advice, working the industry,,,, then you can be classified as Income and not cap gains... and deduct business expenses. So the CRA applies that to the TAX FREE account too.
this is very rare for most of us who are not trading in and out all day. So I meant trade away as in the normal trade here and there, not multiple times a day consistently and not putting in more than your allowed TSFA contributions to remove later.
Since max TSFA is about 46000$ then anyone with close to 10x that has done really well and can be audited... or at risk. Pretty rare.... and fine if you werent running as a business. You are legally supposed to buy and hold for income, but trading Cdn stocks is 99% allowed, but the CRA leaves it vague so they can nail who they want I guess...
3 and 10 year rules apply to many things... so hard to explain. Basically you can change your return or file etc within 3 years and no problem. After that you can have to request permission to get a refund paid to you or file an adjustment... you have to have a reason to be so late. I did it once and was accepted... but it wasn't me who said it. Quantum said it I think and I dont see how it applies to a TSFA, or any filing he referred to. I dont file anything for a TSFA, does anyone?
anyways I dont mean to try to sound like an expert, just a tax filer learning things along the way, so everyone has to do their own research.
I doubt any one with under 100-200k would be at risk of an audit, and if you are not daytrading or in the business then doubt you'd get hit with income. It was some guys in the business who found a way to get around the rules that they cracked down on... ie they;d add 100K on July 1 and trade tax free... then take a w/d on July 31 or pay the 1% penalty... stuff like that I think.
good article, esp the comments after ...