Hi all!
I have a trading margin account and I'm wondering does the length of my securities holding matter for tax purposes?
I'm aware of capital gain taxes but let's say I hold a security for a month and another security for longer than 3 or 6 months in my margin account, would I pay the same taxes on both of them or less taxes on the second security cause I hold it longer?
Thank you
According to CRA, short and long-term capital gain taxes are not available in Canada but they are considered in specific cases.
Your margin account could be treated as the same as a regular trading account that is considered an unsheltered accounts (regular and margin). Dividends, interest, and other payments paid to you as a result of holding shares will be reported on a T5 or T3 slip from your brokerage and will show on your tax return each year.
In addition, it is possible for a taxpayer to have certain capital securities transactions and other income securities transactions in the same year however the CRA looks at several factors to consider if a taxpayer is in the business or capital income. A day trader, for example, could have two investment accounts: one for day trading and the other for long-term investments that are not regularly traded.
You should check the link here for more details.
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