Hot stock tips

[ab1752]

note if you 'trade' it actively and make 'too much', the tax man will come after you. From what I was told over 300k is getting into that area that you will show up on their radar (this was not the point of the TFSA so they are starting to ding people). If you did that from long term swings/low frequency trades, no prob, but if you are actively daytrading, expect a letter one of these years.

We discussed the tfsa potential tax exposure a few pages ago. The cases where cra are auditing, at least the publicized ones, seem to be tied to financial industry professionals who were adding private placements etc into their tfsa and trading the crap out of the winnings. I think that cra will have a tough time when this hits the courts as the guidelines are vague at best beyond the contribution limits. But once they make changes to the tfsa regulations, it won't ever roll back just like the tax code.

 

[Deewar25]

We discussed the tfsa potential tax exposure a few pages ago. The cases where cra are auditing, at least the publicized ones, seem to be tied to financial industry professionals who were adding private placements etc into their tfsa and trading the crap out of the winnings. I think that cra will have a tough time when this hits the courts as the guidelines are vague at best beyond the contribution limits. But once they make changes to the tfsa regulations, it won't ever roll back just like the tax code.

couple of reads: https://www.moneysense.ca/save/investing/cra-tfsa-accounts-court/ https://ca.finance.yahoo.com/news/uh-oh-cra-could-tax-163045504.html https://financialpost.com/personal-...-in-his-tfsa-now-the-taxman-wants-to-know-how

 

[fish brain]

couple of reads: https://www.moneysense.ca/save/investing/cra-tfsa-accounts-court/ https://ca.finance.yahoo.com/news/uh-oh-cra-could-tax-163045504.html https://financialpost.com/personal-...-in-his-tfsa-now-the-taxman-wants-to-know-how

Thanks for these. I didn't realize that A- that I had to keep my TFSA in Canadian only stocks B - that frequent trades might trigger an audit.
I often make my trades in the morning before I go on with outer business, Sometimes I will check things at lunch time if I am in a trending stock, I will trade three or four times a week. I guess I will have to unravel my positions on the NYSE, I have several. I don't ever recall getting a guide stating what I could or could not do when I opened my TFSA

 

[fish brain]

sorry for getting at this late...i'm catching up - traded since 1999, traded with Questrade for most of that. By for the best canadian option. All banks are dinosaurs, the new ones like wealthsimple that offer no fee, well, just research Robinhood to see how well that is going. Interactive Brokers is a good option too for serious traders but its american and I think there may be weird tax filing required with it so I never got around to it.

Stay away from Wealthsimple. The trades are free, but it is very limited in what it can do, very basic things like setting a trailing stop loss is not an option. I don't use it but Questrade, seems to be liked by lots of people.

 

[Deewar25]

Thanks for these. I didn't realize that A- that I had to keep my TFSA in Canadian only stocks B - that frequent trades might trigger an audit.
I often make my trades in the morning before I go on with outer business, Sometimes I will check things at lunch time if I am in a trending stock, I will trade three or four times a week. I guess I will have to unravel my positions on the NYSE, I have several. I don't ever recall getting a guide stating what I could or could not do when I opened my TFSA

its frustrating and really, it's cloudy - I actually just noticed that bit about trading US stocks (I knew otc/pink, but didn't think big boards) - there are several sources that say its a nono (another here: https://www.fool.ca/2020/11/07/warning-the-cra-actually-can-tax-your-tfsa/) but then if you actually go to the government site, there is no mention, and this https://www.disnat.com/en/learning/...vestments-in-an-rrsp-or-tfsa?ancre=topArticle implies it 'could' be part of the treaty, but then make recommendation not to! Bloody hell!
I've always traded in margin account, but I was going to take out a TFSA for the wifey and build that, but I am going to have to have a serious talk with accountant now and get to the bottom of this one!

 

[Rain City]

its frustrating and really, it's cloudy - I actually just noticed that bit about trading US stocks (I knew otc/pink, but didn't think big boards) - there are several sources that say its a nono (another here: https://www.fool.ca/2020/11/07/warning-the-cra-actually-can-tax-your-tfsa/) but then if you actually go to the government site, there is no mention, and this https://www.disnat.com/en/learning/...vestments-in-an-rrsp-or-tfsa?ancre=topArticle implies it 'could' be part of the treaty, but then make recommendation not to! Bloody hell!
I've always traded in margin account, but I was going to take out a TFSA for the wifey and build that, but I am going to have to have a serious talk with accountant now and get to the bottom of this one!

It's Canada. If you didn't knowingly do it then it's not a crime. Better yet do it while on crack and they'll top up your account for you.

 

[Deewar25]

It's Canada. If you didn't knowingly do it then it's not a crime. Better yet do it while on crack and they'll top up your account for you.

lol, you really think ignorance works when the tax man comes? No biggee if you have a few 1000 in there, but I'd hate to have 500k thinking tax-free and suddenly they come after me. "I didn't know" isn't in the excuse book as far as I'm aware. It's bad enough this year for me hoping to justify earnings last year as capital gains and not income (work full time as well). Accountant says 'lets just stick with it and if they challenge, just say, hey, its a hobby I happen to be good at!'

 

[ab1752]

couple of reads: https://www.moneysense.ca/save/investing/cra-tfsa-accounts-court/ https://ca.finance.yahoo.com/news/uh-oh-cra-could-tax-163045504.html https://financialpost.com/personal-...-in-his-tfsa-now-the-taxman-wants-to-know-how

99.999% of people who hold a tfsa won't have any issues. Bend the rules and there will be flags, my tfsa has done well with only a few trades, all canadian holdings, and cra can come for a look any time they want. There is nothing that says you can't invest in high risk Canadian equity holdings within your tfsa. The dude in the fp article seems to have a) been a pro trader and b) moving at high frequency. Even then, I haven't seen any rules against either so seeing these cases tested in court will he very interesting.

 

[sasqman]

Have any of you guys been involved in an IPO that you bought through your TFSA?

 

[ab1752]

lol, you really think ignorance works when the tax man comes? No biggee if you have a few 1000 in there, but I'd hate to have 500k thinking tax-free and suddenly they come after me. "I didn't know" isn't in the excuse book as far as I'm aware. It's bad enough this year for me hoping to justify earnings last year as capital gains and not income (work full time as well). Accountant says 'lets just stick with it and if they challenge, just say, hey, its a hobby I happen to be good at!'

If youre in the capital markets business, and are accepting options for fees for example, cra has you on their horizons as they aim to deem those standard income, not capital gains. This has been a dance on going for some time. I'm not susceptible but a family member is and they're preparing for what the accountants tell them in inevitable. For myself, i delicare employment income, dividends and capital gains if any are realized with the same accountants for 26 years. Consistency is key with cra.

 

[ab1752]

Have any of you guys been involved in an IPO that you bought through your TFSA?

I think you're fine provided you have the correct amount either in the tfsa or the room to deposit the correct amount for the ipo, and its a Canadian holding. You can and should do appropriate due diligence before hand. But cra has a tempest in a teapot about to explode as there are going to be some strong tfsa balances over time. Not everyone is after 4% per annum.

 

[sasqman]

I think you're fine provided you have the correct amount either in the tfsa or the room to deposit the correct amount for the ipo, and its a Canadian holding. You can and should do appropriate due diligence before hand. But cra has a tempest in a teapot about to explode as there are going to be some strong tfsa balances over time. Not everyone is after 4% per annum.

Ya I have the room and transfered the money out through the TFSA so all the paper trail looks good. Either way wouldn't really stop me. Just hopefully take some of the gains and keep them aside for that day. Or I should say "potential gains".......

 

[fish brain]

I was self employed for 20 years. I always played by the rules, never hid income, did everything they asked. I was never audited (hope I don't jinx myself) Have been "retired" for ten years, but if you tell me I can accrue income tax free, I am sure as hell going to accrue as much as I can!

 

[Deewar25]

If youre in the capital markets business, and are accepting options for fees for example, cra has you on their horizons as they aim to deem those standard income, not capital gains. This has been a dance on going for some time. I'm not susceptible but a family member is and they're preparing for what the accountants tell them in inevitable. For myself, i delicare employment income, dividends and capital gains if any are realized with the same accountants for 26 years. Consistency is key with cra.

whats do you mean 'accepting options for fees'? I am an active trader (day trades and swings) and buy sell calls/puts, but don't get into any other weird stuff. Same accountant for several years so that is one thing I keep consistent. I wonder if CRA will mostly look the other way for 2020 as it was unreal for many and accept it as an anomaly vs the norm.

 

[Unreel]

you laugh, but it went 5000%!

Thats why I wanted to buy! lol, but in all seriousness this just defines whats going on in the markets, absurd speculation on company's that dont exist. kinda like dotcom bubble. Also I have tulip bulbs for sale, only $19,000, its a bargain trust me.

 

[sasqman]

Thats why I wanted to buy! lol, but in all seriousness this just defines whats going on in the markets, absurd speculation on company's that dont exist. kinda like dotcom bubble. Also I have tulip bulbs for sale, only $19,000, its a bargain trust me.

What color?

 

[Rain City]

What color?

Back off they're mine

 

[sasqman]

Thats why I wanted to buy! lol, but in all seriousness this just defines whats going on in the markets, absurd speculation on company's that dont exist. kinda like dotcom bubble. Also I have tulip bulbs for sale, only $19,000, its a bargain trust me.

The speculation on the worthless companies is pretty crazy, but the amount of cash injections in the economy keep me pretty Hopefully for good returns on everything else for a couple years.

 

[sasqman]

Back off they're mine

21,000

 

[ab1752]

Btw the us holdings in a tfsa is ok but the dividends can become taxable and I hear it can be painful but I do not have first hand experience as all the holdings in my tfsa are Canadain. You can add most exchange traded equities, in Canada that's the cse too.