Posted on: 09-07-10 12:00:55
No you cannot deduct 29 X 2 from your profit because you didn't add them to your profit. Basically your profit was 600 but you had expenses of 58 so now net profit is 442.
In case it was a loss deal then yes it is considered part of loss and can be adjusted against any other profit you made.
Thx
Manoj
Quote:
Originally posted by mitsaus
Say, I buy 100 shares of Canadian Tire at $55 and sell at $60.
I bank with TD Waterhouse which charges $29 per trade.
So my cost is $5529. When I sell its $5971
1) My net profit would be $442. How much tax would I pay?
2) Am I able to include, $29 (which I pay twice), before profit is calculated (hence pay lower tax) ?
Thanks
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Manoj Rastogi
Hi,
I checked this website
http://www.taxtips.ca/taxrates/on.htm
assuming that I am in the 40K to 65K taxable income band, I gather that my income tax liability is 15.58% on $442.
So the tax payable would be $68.86
and my net gain (after taxes) would be $373.14
Is that a correct assessment?
Do I have to pay any additional taxes or anything else to take into account?
Quote:
Originally posted by man_krastogi
No you cannot deduct 29 X 2 from your profit because you didn't add them to your profit. Basically your profit was 600 but you had expenses of 58 so now net profit is 442.
In case it was a loss deal then yes it is considered part of loss and can be adjusted against any other profit you made.
Thx
Manoj
Quote:
Originally posted by mitsaus
Say, I buy 100 shares of Canadian Tire at $55 and sell at $60.
I bank with TD Waterhouse which charges $29 per trade.
So my cost is $5529. When I sell its $5971
1) My net profit would be $442. How much tax would I pay?
2) Am I able to include, $29 (which I pay twice), before profit is calculated (hence pay lower tax) ?
Thanks
I hope you have rest of the night and the week end to sit down and read this chapter.
http://www.cra-arc.gc.ca/E/pub/tg/t4037/t4037-e.html#P10_33
http://www.cra-arc.gc.ca/E/pub/tg/t4037/t4037-e.html#P487_50715
You get to keep 50% of what you made as 'net profits'. The other 50% attracts tax at a bracket you fall under after addition of this with the total income. It is not that simple, but any of the TAX Programs that you might have come across will simulate a scenario for you. You just move your employment income a little high or low to get to understand the 'what if' my salary was this much. It is a good exercise to do to get to know the tax situation when one makes some additional income when they trade for a living.
Freddie.
Hi Investment Guru's,
Can you confirm that in this situation - I would get $221 (as net profits - and pay no tax on that) and I would pay tax on $221 at the 15.58% = $34.43
[assuming that I am in the 40K to 65K taxable income band - from this link http://www.taxtips.ca/taxrates/on.htm ]
To summarize, my net gain would be $221 + $ 186.57 = $407.57
and CRA would get $34.43
Thanks in advance.
You are as close to the figures as I could have arrived at. But you must read the chapter completely and do the spade work if you want to avoid an accountant. OR alternately use the TAX software and arrive at the figures that you have come up with. There could be a few more extra dollars in savings that you will only get to know after plugging the dollar figures into it.
You are well on your way to start paper trading now.
Freddie.
Thanks for the tip. I will print out the article and read it.
1) what do you mean by the below
>>There could be a few more extra dollars in savings that you will only get to know after plugging the dollar figures into it.
2) What is "paper trading" ? You mean to be a day trader? Do you think its a good idea?
>>You are well on your way to start paper trading now.
3) Are their any courses you recommend or any good books?
Quote:
Originally posted by ftfl
You are as close to the figures as I could have arrived at. But you must read the chapter completely and do the spade work if you want to avoid an accountant. OR alternately use the TAX software and arrive at the figures that you have come up with. There could be a few more extra dollars in savings that you will only get to know after plugging the dollar figures into it.
You are well on your way to start paper trading now.
Freddie.
Quote:
Originally posted by birentoronto
Thanks for the tip. I will print out the article and read it.
1) what do you mean by the below
>>There could be a few more extra dollars in savings that you will only get to know after plugging the dollar figures into it.
2) What is "paper trading" ? You mean to be a day trader? Do you think its a good idea?
_______________________________________________________
A Tax software maximizes the profits and also sees the other entries that you have made or will make in such questions that they pose in it.
To give you an example. it will ask if there are any other expenses associated with the sale and purchase?
You have the cost of a computer, which depreciates on an yearly basis, there might be Data feed costs, Fees for the Internet provider, accounting fees if you did use their services etc., All of these come into play when you compile your balance sheet.
2) 'Paper Trading' ( is a general term or) embraces a wide array of things. You have just started to look into the field of trading and as an encouragement, I said that you are set well on your way to do Paper Trading. Here you are doing the exploring without ever losing a cent. There are steps that one has to learn prior to actually deploying their financial resources.
In short, you are doing well and are progressing in the right direction. And in continuation, if can get hold of a Globe and Mail and see the stocks performance column, you will see a header with all of these terms in it. Get to know what it is and what they mean and how to use them and watch out for the figures in the future. Here is a sample of it, for a stock called IBM. Go through a few more to get an idea. Use 'RIM' and search for results. (you have to fill that symbol in the search engine. Research In Motion, for starters)
The Globe and Mail : http://www.theglobeandmail.com/globe-investor/
* Open 127.90
* Previous Close 127.96
* High 128.20
* Low 127.29
* Bid 127.60 x0
* Ask 127.86 x0
* Volume 3,898,464
* 52-week High 134.25 01/19
* 52-week Low 99.50 07/08
* Beta 0.65
* Market Cap 166,220.04M
* EPS 10.28
* P/E 12.45
* Forward P/E 10.37
* PEG 1.08
* Annual Dividend 2.60
* Yield 2.00
3) There a few books on basics. It gives you just the bare basics which you can pick up from the libraries and get to know the terms that they use. Such as the ones from the above example. Look for 'Value Line' in the Library. They are no longer on the shelves.
Once you get to know and understand them, then you will look for these terms in each of the stocks that you consider purchasing. It is the start of good trading. When you start doing the analysis, it is called the Performance Analysis.
Move on gradually to the next level.
One thing that I must impress upon you, any amount of reading will only give you more knowledge in one such direction as observed and written in the book. Keep working with what you assimilate and see if you have an opportunity to apply or use in your daily routines.
After you complete your reading, get into a course called Charting. It could be simple bar charts or Candle Stick charting. That will enhance your knowledge to the next level. From there you see if you can go one more level up, to the next level. Which is understanding the technical side of it. No one has ever found out what it is and will they ever find everything that it conveys. and hope you do find what the others missed.
Here is another book for advanced studies. It is written by an author by name John J. Murphy and the title is "Technical Analysis of the Futures Markets." Don't go buying these books. Get them on loan from the library and expand your knowledge into trading at a pace that you can grow. But do take relevant notes as you read through them.
Will you be ready for Paper Trading after this. Sure you will. And guess how long it will take. A good life time or.....two ... or......
Freddie
