After the recent change in capital gain for corporations (50% to 67% ), income from stock trading should change to active income instead of Capital gain, will make sense or not?
Any suggestion please.
Thank you
Nothing you just said makes any sense.
Stock trading MAY be considered active income if it can be justified (meaning you can prove the proprietor or the corporation that trades does it on a regular basis, in which case it may be classified as business income). Otherwise, infrequent trading is stuck at the 67% inclusion rate after June 25th, 2024.
There are other factors to consider however, but this is just the base case.
What are the other factors?
Stock transaction count is around 350 buy and sell both together per last year.
One example: if the corporation’s principal purpose is to derive income from property (i.e. gains/losses, dividends, interest, etc), it would likely be deemed a Specified Investment Business, and thus lose the SBD (unless it employed at least 5 people performing the tasks related to earning that income). If the corporation’s principal purpose is not deriving income from property, then you might have a hard time proving it should be recharacterized as “active” income.
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