Tilray Brands Inc TLRY

Margin vs cash Account

[TheNewOldtimer]

Just wanted to know or get an opinion on using a Margin vs Cash account for trades.
I have always used a TFSA on my trading platform but you can sometimes run into problems with taxes on over contribution year over year doing too many trades.
The Cash account may work better with no limit on contributions and being non registered as opposed to a TFSA?

thx

[CaneIsAbel]

A TFSA account has strict limits. Any contributions made will count towards the limits the CRA sets out each year you can contribute. If you withdrawal any money it can not be re contributed. If you do it will count towards your contribution limit and the withdrawal will not count as a withdrawal. Any overage can receive a one percent Penelty a month. That may not sound like much but consider this

[CaneIsAbel]

Stick within your limits. Always check you Canada cra account at the end of March each year to see your contribution limit. Do not go by what they list in January. It takes the CRA until end of March to update from year before. If you contribute exactly what the cra tells you, you can in January. Then the CRA suddenly adjusts and you in turn quickly withdrawal to meet the new number they will

[TheNewOldtimer]

  Thanks for the information, I did learn the hard way on this one. Now I have to decide on a different type of trading account as I do like to buy and sell on occasion and it does not take long to exceed the limit, thanks for responding! OT

[MrVerbatim9800]

There is a 30 day no trade rule of an asset within a TFSA. Buy an asset on the 1st , sell it 31 or 32 days later (for example) and it will be O.K. Otherwise it can be deemed as "business income" V

[Oldweed]

To bad its not considered a tax write off when you lose money! Funny how that works...only see the income.

[CaneIsAbel]

If someone is deemed a day trader and operating a buisness, then losses can be written off against any income.  Any profits generated as a day trader will be 100 percent taxable. If you're a long term investor you benefit from Capital Gains tax which is fifty percent of profits that are taxed. Half your profits are added towards your all round income and you pay taxes  accordingly to

[CaneIsAbel]

So if you're deemed a day trader and you made a few bucks working at Wendy's but lost a fortune on your side business day trading, the loss from day trading can off set your income from Wendy's and you would end up showing a loss and pay virtually no taxes that year. So it's not always beneficial to the CRA to deem someone a business. There has to be enough going on for them to do

[CaneIsAbel]

To sum it up. Unless you're flipping stocks left and right making a fortune, the cra will almost never attempt to deem someone a day trader. Because most daytraders suck and when you're deemed a business all your awfulness at day trading can be written off against income you earned workimg a job and the CRA will get nothing that year from you. As a matter of fact because you took a massive