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Gold/Mining/Energy : Day trading in Canada -- Ignore unavailable to you. Want to Upgrade?

To: Buckey who wrote (2890)	4/21/1999 10:01:00 PM
From: Kayaker	Read Replies (1) \| Respond to of 4467

Here's a cut and paste below. Point 12 states "12. Although none of the individual factors in 11 above may be sufficient to characterize the activities of a taxpayer as a business, the combination of a number of those factors may well be sufficient for that purpose." So, it seems to require "a number" of the factors. They seem purposely vague about it. No way will I report as income until forced to. ========================================= DISPOSITION OF SECURITIES - INCOME OR CAPITAL 9. Some security transactions are clearly on income account and these types of transactions are discussed in 15 to 21 below. For other security transactions it will be necessary to examine the facts of the specific case in order to determine whether a transaction is on income or capital account. The tests that the Courts have applied in making such a determination are those of "course of conduct" and "intention" and these tests are discussed in 10 to 13 below. The factors to be considered when determining whether the gain or loss on the disposition of a bond, debenture, bill, note, mortgage, hypothec or similar obligation (debt obligation) is on income account or capital account are set out in IT-114, "Discounts, Premiums and Bonuses on Debt Obligations". 10. Where the whole course of conduct indicates that (a) in security transactions the taxpayer is disposing of securities in a way capable of producing gains and with that object in view, and (b) the transactions are of the same kind and carried on in the same way as those of a trader or dealer in securities. the proceedsof sale will normally be considered to be income from a business and, therefore, on income account. 11. Some of the factors to be considered in ascertaining whether the taxpayer's course of conduct indicates the carrying on of a business are as follows: (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. 12. Although none of the individual factors in 11 above may be sufficient to characterize the activities of a taxpayer as a business, the combination of a number of those factors may well be sufficient for that purpose. Further, subsection 248(1) defines the "business" to include "an adventure or concern in the nature of trade" and the courts have held that "an adventure or concern in the nature of trade" can include an isolated transaction in shares where the "course of conduct" and "intention" clearly indicate it to be such. 13. A taxpayer's intention to sell at a gain is not sufficient, by itself, to establish that the taxpayer was involved in an adventure or concern in the nature of trade. That intention is almost invariably present even when a true investment has been acquired if circumstances should arise that would make it financially more beneficial to sell the investment than to continue to hold it. Where, however, one or other of the above tests clearly suggests an adventure or concern in the nature of trade and, in addition, it can be established or inferred that the taxpayer's intention was to sell the property at the first suitable opportunity, intention will be viewed as corroborative evidence. On the other hand, inability to establish an intention to sell does not preclude a transaction from being regarded as an adventure or concern in the nature of trade if it can otherwise be so regarded pursuant to one or more of the above tests.