https://www.rbcroyalbank.com/healthcare-financial-solutions/advice-learning/article/?title=what-you-should-know-about-frequent-trading-in-your-registered-accounts#:~:text=If%20you%20trade%20extensively%20in,would%20be%20subject%20to%20tax.
How much trading is too much?
The CRA hasn't provided precise guidelines. However, in a 2018 Income Tax Folio (a technical publication that detail the agency's interpretation of the law as it applies to income taxes), the CRA states, "The determination of whether a particular taxpayer carries on a business is a question of fact that can only be determined following a review of the taxpayer's particular circumstances."
What about frequent trading in other registered accounts?
What about frequent trading in other registered accounts? Other registered plans, such as RRSPs, RRIFs and RDSPs, are generally also taxed on income earned from carrying on business, although the exact rules and consequences may differ. As for RESPs, if the CRA considers that an RESP is carrying on a business, it can revoke the plan's registration and therefore its tax-sheltered status.
What does the CRA take into account?
Among the key factors it considers are:
frequency of transactions (to determine if there's a history of extensive buying and selling of securities)
period of ownership (to see if securities are usually owned only for a short period of time)
knowledge of securities market and time spent studying the market
financing (to determine if security purchases are financed primarily on margin or by some other form of debt)
type of shares (to see if they are normally speculative in nature or of a non-dividend type)