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Old 04-11-2012, 11:52 AM   #1

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Trading Futures As a Sole Prioperter

Hi,

I am a beginner futures trader and want to take advantage of the tax benefits. I reside in Ontartio Canada. I looked up on Canada Revenue Website and in form IT346R it indicates speculative trading in futures is taxed on 50% of income. My question is what deductions can I make?. Can I claim computer hardware...internet, ninjatrader license, books, education, travel and car?

If there is anyone trading futures in Ontario and know how best to set this up as a business and has contacts for accounting if needed i would greatly appreciate.
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Old 04-11-2012, 12:30 PM   #2

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Re: Trading Futures As a Sole Prioperter

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Originally Posted by sanjthetrader »
Hi,

I am a beginner futures trader and want to take advantage of the tax benefits. I reside in Ontartio Canada. I looked up on Canada Revenue Website and in form IT346R it indicates speculative trading in futures is taxed on 50% of income. My question is what deductions can I make?. Can I claim computer hardware...internet, ninjatrader license, books, education, travel and car?

If there is anyone trading futures in Ontario and know how best to set this up as a business and has contacts for accounting if needed i would greatly appreciate.
I am confused. I thought that no one works or has to pay income tax in Canada.

Your best bet is to contact an accountant.
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Old 04-11-2012, 07:42 PM   #3

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Re: Trading Futures As a Sole Prioperter

Quote:
Originally Posted by sanjthetrader »
Hi,

I am a beginner futures trader and want to take advantage of the tax benefits. I reside in Ontartio Canada. I looked up on Canada Revenue Website and in form IT346R it indicates speculative trading in futures is taxed on 50% of income. My question is what deductions can I make?. Can I claim computer hardware...internet, ninjatrader license, books, education, travel and car?

If there is anyone trading futures in Ontario and know how best to set this up as a business and has contacts for accounting if needed i would greatly appreciate.
You're just starting out and your main concern is tax implications . . . seriously? If I were you I would be more concerned about how I could offset my losses as a tax cost . . .

That sounds terribly unhelpful, but that's the reality as a 'beginner' (your words not mine).

Bluehorseshoe

ps. Supposing you're actually going to make a decent return, here's a rough blueprint:

- Set up as a business in an offshore jurisdiction.
- Allow profits to accumulate and compound them within your strategy (yes, that means you don't get to spend any of the money you make at the time you make it).
- Once you've accumulated a decent amount of money move to that jursidiction, extract and enjoy the profits. What, you don't want to live in the Bahamas? Tough luck . . .
- Alternatively, extract the profits from that jurisdiction and pay the tax within your own. Through compounding you'll still have made far more in real dollar terms than by removing profits on a regular basis. It's your choice.
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Old 04-11-2012, 08:21 PM   #4

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Re: Trading Futures As a Sole Prioperter

First of all you are assuming as a beginner i am not profitable. I actually am. Making a net profit every month. Losing days yes..losing month yet? NO.
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Old 04-12-2012, 12:41 AM   #5



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Re: Trading Futures As a Sole Prioperter

Quote:
Originally Posted by sanjthetrader »
Hi,

I am a beginner futures trader and want to take advantage of the tax benefits. I reside in Ontartio Canada. I looked up on Canada Revenue Website and in form IT346R it indicates speculative trading in futures is taxed on 50% of income. My question is what deductions can I make?. Can I claim computer hardware...internet, ninjatrader license, books, education, travel and car?

If there is anyone trading futures in Ontario and know how best to set this up as a business and has contacts for accounting if needed i would greatly appreciate.
Yes you can incorporate and deduct everything you listed ... but note the following:

- office space is a proportion based on office vs. house size
- car will be iffy, depends if you can make a case you use it to trade futures at home!
- annual incorporation taxes need to be filed and this will cost at least $1000 or so (if you pay someone)

But bottom line is the business tax rate is 15% (at least in Alberta) so this is well worth it if you are making a a decent profit and this in incremental to other income.

MMS
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Old 04-12-2012, 10:46 AM   #6

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Re: Trading Futures As a Sole Prioperter

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Originally Posted by sanjthetrader »
First of all you are assuming as a beginner i am not profitable. I actually am. Making a net profit every month. Losing days yes..losing month yet? NO.
I am assuming that, yes - it's not an unreasonable assumption to make, although it is evidently untrue in your particular case. If my assumption is wrong then you can just ignore that part (or all) of my post.

Regards,

Bluehorseshoe
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