Accurately claim your investments on your taxes

Investments, also known as capital property, come in different forms, including stocks, mutual funds, bonds, ETFs, cryptocurrency, land, real estate, and more. If you earn interest, capital gains, or dividends income from your investments, you have to report these amounts as investment income to the Canada Revenue Agency.

The amount of tax you pay on your investments depends on your total annual taxable income and where you fall in the federal and provincial tax brackets for a given tax year.

• You are taxed on 50% of your total capital gains.

• Your dividend income gets added to your taxable income.

• Eligible dividends vs non-eligible dividends are taxed differently based on the gross-up rate. The gross-up rate is 38% for eligible dividends and 15% for non-eligible dividends.

• You may be eligible for the Dividend Tax Credit, a non-refundable tax credit that reduces the amount of tax you owe.

• Interest income is 100% included in your income and is taxed according to your tax bracket.

• Rental income after deductible expenses (net rental income) is added to your income and taxed according to your tax bracket.

Depending on the type of investment income you’ve earned (e.g. capital gains, interest, dividends), you would report them on one or more of the following tax forms:

• T5 - Statement of Investment Income

• T3 - Statement of Trust Income Allocations and Designations

• T5008 - Statement of Securities Transactions

• T5013 - Statement of Partnership Income

• T4PS - Statement of Employee Profit-Sharing Plan Allocations and Payments

• T4RSP - Statement of RRSP Income

• In Quebec: RL-3, RL-16, RL-15, RL-18

You also have to report investment income not included on a CRA slip such as; sale of land, sale of personal-use property, RRSP contributions, rental income or foreign investment income.

How you report your stocks on your tax return and how much tax you pay on them depends on whether you’re a day trader or investor. If you’re a day trader, 100% of your profits will be considered business income, and taxed at your current tax rate. If you’re an investor, your stocks are considered investments and only 50% of the capital gain you “realize” when you sell your stocks is taxed. With FYN iQ Live Assist and Review, Premier, you get unlimited help and advice from a live tax expert, plus a final review before you file.

Investment property, which is a form of capital property, is real estate used to earn income either through renting it out, selling it in the future for a profit, or both.

In Canada, you have to pay capital gains tax when you sell an asset you invested your money in for more than what you bought it for. Your capital gains are only realized and taxed when you sell the asset. For example, if you bought stocks for $50 a share and after a few months you sell them for $52 a share, the $2 profit is considered a capital gain.

There are a few strategies you can try to reduce your capital gains tax including:

1. Use capital losses to offset your capital gains

2. Invest through a tax-advantaged account like a TFSA

3. Sell your assets when your income is low to minimize the tax your pay