[DRJELLIS]

I have a client who has turned into a Day Trader. He has thousands of share purchases and sales to enter into his annual tax return. Anybody have a bright idea on how to enter all this without entering every single detail?

Thanx

[samhill]

DRJELLIS, on 07 July 2010 - 08:31 AM, said:

I have a client who has turned into a Day Trader. He has thousands of share purchases and sales to enter into his annual tax return. Anybody have a bright idea on how to enter all this without entering every single detail?

Thanx

Your client must track his buys and sells somehow.

We have one client who just gives us a spreadsheet.

Another client uses THINKORSWIM Inc as his trading partner and they provide him with an annual trading summary. He has to ask for it. They provide one in Canadian dollars and one in US dollars.

You can actually use a spreadsheet to aggregate his trades and just enter one number to the Schedule 3.

Also, Profile says that the number of trades in their entry form is virtually limitless or something like that, so you can enter each buy and sell individually, without running out of room.

My major suggestion is to ask for a retainer before you begin!

[Tim Parris]

DRJELLIS, on 07 July 2010 - 10:31 AM, said:

I have a client who has turned into a Day Trader. He has thousands of share purchases and sales to enter into his annual tax return. Anybody have a bright idea on how to enter all this without entering every single detail?

Thanx

A day trader is operating a business as opposed to an individual who occasionally buys and sells equities and other marketable securities. (Apart from those day traders who have taken the election with respect to Canadian but not foreign securities.) Basically, if the individual is performing significant number of trades, using marginal accounts, leveraged trades, deriving the majority of their income from trading, or other techniques, the tax department may view them as operating a business as opposed to someone who invests on the side.

A business, as opposed to trades, is reported on one of the self-employment forms. Gross sales, less cost of goods sold (i.e. ACBs), less other related business expenses, is net business income.

In Canada, traders should expect to pay CPP/QPP on their trades so there is a significant disadvantage to being a day trader as opposed to in the States where there day trading confers a reduced tax obligation.

Would the CRA know if you reported the day trading on Schedule 3? They have found out in several cases and gone to court. Do you wish to take the risk?

[David Blue]

In my practice client either supplies an excell spreadsheet or someother form of trade summary.
other wise.
Min. charge is $ 1.00 per entry if all buys and sells are matched up. ( Entered into profile, completed by clerk )

I suggest you will get a summary within a day or so. Client will learn to track all buys and sells.