Should you claim your investment gains and losses as capital or income?  Well that depends on what you’re investing in and the frequency.

For most investors, their gains and losses from the sale of security stocks are treated as capital gains and losses.  What this means is 50% of capital gains are taxed instead of 100%.  The only way you would pay less in capital gains is if you had any capital losses to offset the gains.  You can carry capital loses back 3 years or forward into the future years.

If you are a day trader, you would most likely use your gains and losses as business income instead of capital.  What this means is your gains are 100% taxed and your losses are considered a deductible. 

If you have a registered plans such as Registered Retirement Savings Plan (RRSP), Registered Retirement Plan (RPP) or Registered Education Savings Plan (RESP), these investments are tax-sheltered so you don’t have to worry about capital gains and losses.  If you have non-registered investments then you will incur capital gains.

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