Post by
nofluff on Dec 19, 2020 5:56am
Taxes and trading
I do not understand u.s. implications. Canada is real simple.
1. in a cash account the trading house keeps record of book value and sold value for profit or loss and sends u and the tax department both a copy.
2. If at year end tgere is a total account net loss, it is carried forward for a year of profit to use against the profit.
3. Once there becomes net profit, it is taxed at personal rate on half the profit.
4. The rest is tax free.
5. There is no tax work for trader.
6. Tax free savings accounts have no tax if you do not trade inside them much and r not a professional trader.
7. Can not write losses against anything.
8. Registered retirement savings plans gives an immediate 30% of investment cash back to a middle class income earner.
9. If 15 thousand per year is invested, you get 5 thousand cash back through tax reduction.
10. Almost tfsa yearly limit. So no cost to fill up tfsa.
11. Can trade inside tax free until 71 years old at which time u must take 5% out that is taxable at personal rate.
12. Retirement example. U r 71 and wife is 61. Neither r gainfully employeed anymore. Canada pension plan is paying 18 thousand per year. Oas is paying 6 thousand for total of 24 thousand per year. Your rsps r worth 240 thousand.
You r forced to take 12 thousand. That is 36 thousand for u and your wife.
No provincial tax but 2 thousand fed tax. So 24 thousand more to live.
You draw that from tax free savings acount.
13. If you have more than 240 thousand in rsps u would b forced to pay 25% on every rsp withdrawal over 12 thousand dollars.
14. When u consider that almist 1 billion people go to bed every nite hungry, our tax problems r not that big of a deal.
This was a raxing post. Time 4 second sleep.
nf