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Technology Stocks : SDL, Inc. [Nasdaq: SDLI] -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (3099)	10/20/2000 2:41:13 PM
From: Kayaker	Read Replies (1) \| Respond to of 3951

Interesting. I also noticed you said Canada is changing cap gains so that it is only on 50% of profits. Correct. I have also heard there is no long/short term distinction in the tax rate. Is that true? If so, doesn't that mean the cap gain rate (at least compared to short-term rate of 39.6% here) is lower in Canada? I guess so. You'll be sorry you asked though. :-) We (I) have a huge problem here. Revenue Canada takes the view that if you are "trading" rather than "investing" you will have all your "capital gains" reclassified as income which would be taxed at over 50%, i.e., double the capital gains rate. Someone who got audited posted in another thread that the Revenue Canada auditors are nailing people who do more than 30-40 trades a year. Doing options is also a negative here. They don't have clear rules on it. It's driving me completely nuts. I have to live with the possibility of being audited (going back 3 years) and paying a huge amount of extra tax, plus interest! My accountant is bringing in a high level accountant (@ $400 per hour) to see if we can get clearer on the rules. Here are SOME of the criteria that MAY be considered in reclassifying your gains as income: (a) frequency of transactions - a history of extensive buying and selling of securities or of a quick turnover of properties, (b) period of ownership - securities are usually owned only for a short period of time, (c) knowledge of securities markets - the taxpayer has some knowledge of or experience in the securities markets, (d) security transactions form a part of a taxpayer's ordinary business, (e) time spent - a substantial part of the taxpayer's time is spent studying the securities markets and investigating potential purchases, (f) financing - security purchases are financed primarily on margin or by some other form of debt, (g) advertising - the taxpayer has advertised or otherwise made it known that he is willing to purchase securities, and (h) in the case of shares, their nature - normally speculative in nature or of a non-dividend type.