Warning occurs from an investment loss on T5008 from day trading

[asmal]

I am a day trader and wish to declare a loss for the tax year.

I followed the instructions here for reporting income from day trading in my T5008:

How do I report income made from day trading?

Basically, on the T5008, for the Type of Income field, instead of selecting "Capital gains", I selected "Investment" as indicated in the article above.

Now, when I review at the end, I get the following warning:

There is a loss for at least one of the T5008 slips which you have reported as investment income. Loss is allowed only when investment activities are reported as business.

How am I supposed to do this? There is no easy guide which guides me through this process to correct this warning and I followed all the steps exactly in the mentioned article.

[Tom_Cheng]

If you enter any T5008 slip with a capital loss into TurboTax, you're given a warning when you reach the Review stage. If you're sure that you've entered your T5008 amounts correctly, you can ignore the warning. 

For more information, please click: What should I do if I have a capital loss on a T5008 slip in TurboTax Online?

Thank you for choosing TurboTax.

[asmal]

thanks @Tom_Cheng,

I'm sure the amounts are correct, but I was just worried that the warning says loss is only allowed if its reported as business income.

I want to be able to carry forward those losses - and since I'm day trading amongst other criteria, CRA considers it business income.

However, I did not report it as business income anywhere. I only selected "Investment" for type of income. Does Turbotax automatically handle this or do I need to report this as self-employment income somewhere and remove the T5008 slips?

[Muskokie]

I have run into the same situation, day trading is considered business activity.  As much as I have been able to gather, the T5008 should not be filled in but used to calculate business income(loss).  I am trying to understand how to fill out the T2125 as it relates to reporting a loss.

On the T2125, if I report income (sale of investments) and expenses (purchase of investments) it calculates the loss correctly. Problem - now a warning stating CRA wants me to register for GST since the Gross Income (sale of investments) exceeded $30,000.

What is the correct way to fill in the T2125 to report either day losses?
Thx!

[TurboTaxBrenda1]

Please follow these steps: 

• What should I do if I have a capital loss on a T5008 slip in TurboTax?

Then fill out your T2125 accordingly to your income & expenses.

• Filing a T2125

Once both have been filled out you should not get the warning for your T5008 slip.

I believe the warning given for the T2125 will not prevent you from Netfiling, but it is letting you know that you need to register for GST/HST that you have collected to remit to the CRA. As your income is above the $30,000 threshold.

The following link directly from the CRA will guide you through the process:

• CRA - Register for a GST/HST account
• The Complete Guide on Collecting GST/HST for Self-Employed Canadians

If after taking these steps you are still encountering an issue, then contact our phone support team
as they have the option to view your screen and troubleshoot what could be causing these warnings.

• Contact Us

Thank you for choosing TurboTax.