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First time doing my own taxes, trying to declare day-trading


C B
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Hi all, first time filing taxes here. I'm sure that comes up a lot :)

 

I am trying to declare day trading income. The amount of trades is relatively small (~20 I think), but trying to declare them is a bit confusing. I have done some reading and determined that it qualifies as "income" rather than an investment, since many of these trades were settled the same day. Some were not, but based on sections 9 and 10 of https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/it479r/archived-transactions-securities.html it appears I meet the other qualifications as well due to a nearly complete degree in a finance related field, and significant time studying the topics.

Anyways, it seems like what I should be doing is declaring it as self-employed business income. The closest I see is T2125 - Business Income, but there are fields for which I have no answer (Federal account number). Do I leave these fields blank? I believe the closest NAICS code is 523110 - Investment banking and securities dealing.

I was under the impression when I started this that you would simply need to take documents from your broker (T5, T5008, both of which I have) and fill the fields in the software similar to a T4. Of course that isn't so. Any help would be appreciated, especially if you've been in this situation before and can give me more specific advice. The complexity of this has started to make me nervous, so I'm seriously considering taking it to a professional at this point just so I don't screw something up with the CRA.

 

Thanks, Chris

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You need to consult a tax accountant or a tax lawyer to find out how you should report your trading profit/loss.  NetFile is a tax filing software only that allows you to prepare your taxes and file them electronically (optionally) to all the tax agencies but is not a tax-advising service.  It cannot and does not offer tax advice as it is not qualified to do so. 

Good luck!   

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Hey C B, try doing a search for "day trading" and look at what other people have done and their questions. Day trading is usually considered by CRA as business income rather than capital gains and losses. Yes taking it to a professional CPA is usually a good choice. That said there is value in asking this community which increases your knowledge and helps your understanding moving forward.

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