# Is this true?



## Canuck (Mar 13, 2012)

A guy just called in to BNN and said that in Canada if your Capital gains is more than your income that you are taxed at the full rate, not 50%.

Is that for real?

What if you've held a stock for like 6 years and have made $80,000 on it and wish to sell, yet your income is only $60,000?

that doesn't seem fair at all.

Or is that caller out to lunch?


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## Charlie (May 20, 2011)

not true.


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## CPA Candidate (Dec 15, 2013)

Do not listen to laymen offering tax advice.


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## Charlie (May 20, 2011)

CPA Candidate said:


> Do not listen to laymen offering tax advice.


agreed. Come the internet -- we'll set you straight.


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## Canuck (Mar 13, 2012)

thanks!

Kevin Leary never questioned it, which made me think there may be some truth to it, but Kevin Leary is not a tax accountant.


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## Guban (Jul 5, 2011)

This is only true if you are in the business of selling for capital gains. eg. professional stock trader or property flipper.


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## Eclectic12 (Oct 20, 2010)

Canuck said:


> ... Or is that caller out to lunch?


The caller is out to lunch (or has left out details that apply to their situation) ... and anyone who was directly involved who did not dispute this was either distracted or lazy.

It's not about what income one makes, it is about how the capital gain is classed. As Guban says, the way this would happen is if one is in the business, which for stocks means something along the lines of a day trader.
http://www.taxtips.ca/personaltax/investing/taxtreatment/capitalorincome.htm

For the amount of buying/selling most people do, especially where there is employment that does not involve stocks, the capital gains will be capital gains (i.e. included at 50%) and not income.

Note though that for a day trader, it's not all bad as while they will need to include 100% of gains, they also get to include 100% of losses.


Cheers


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## Guban (Jul 5, 2011)

Eclectic12 said:


> Note though that for a day trader, it's not all bad as while they will need to include 100% of gains, they also get to include 100% of losses.
> 
> 
> Cheers


They also get deductions that other can't take. eg. Internet, computer, research subscription costs, ... They are a full business.

All, in all, however, I'd still take the 50% capital gains inclusion rate.


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## OptsyEagle (Nov 29, 2009)

Guban said:


> This is only true if you are in the business of selling for capital gains. eg. professional stock trader or property flipper.


Agreed.

He probably said "in Canada if your Capital gains is your income that you are taxed at the full rate, not 50%."


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## nedstar (Dec 8, 2014)

Charlie said:


> agreed. Come the internet -- we'll set you straight.


Made me chuckle....lol :biggrin:


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