|
 ASK
OUR EXPERTS...
If I trade stocks but over the years the money I made evens
out against the money I lost, do I need to claim this on my taxes?
By Debbie Patterson Of Odessey Business Services
This is something many people question and instead of asking what to do,
many just sweep this issue under the carpet and not worry about it at tax
time. Not a good habit to get into.
It is possible to trade stocks in different ways, some need to be claimed on
taxes, some do not.
The first option is called a Cash Account. Cash Accounts are set up with a
broker, or online, or with a financial planner. This is an active trading
account and all sales transactions for the year must be claimed on your
personal taxes. A detailed transaction summary for the year is usually
mailed out in January, so if you didn’t receive one, call to get a copy.
Many people think if they had more losses than gains, they don’t need to
claim them. Wrong. You may have losses this year and if you don’t claim
them, you can’t use them against gains you had in past or in future years.
Another common way people trade stocks is under an RRSP umbrella. If this is
the case, all transaction slips and statements will show RRSP before it.
These do not have to be claimed as capital gains or losses as the trading is
done within your RRSP and any gains and losses, grow or shrink your
investment. Check with your investment advisor to see if you are trading or
if you would like to allocate a portion of your RRSP’s to trading activity.
If you work for a large corporation, it is possible that you are given
stocks as part of your contract or bonus. Because you don’t actually put the
initial investment in, it is easy to forget that once you cash those stocks
in, you are responsible for claiming them on your taxes.
Capital gains is one of the better way to claim income as you are only taxed
on 50% of the income made. So if you traded all year and with your gains and
losses, you come out with a $2000.00 gain, you only pay tax on half of that,
or $1000.00.
Capital gains and losses do not only mean stocks, you can incur gains by the
sale of a second home and may be able to use previous losses against that
gain if you claimed them in prior years.
For more details on this subject, please contact Debbie Patterson of
Odessey Business Services at 403.816.5098 or visit her website at
www.odesseybusiness.com |
