During 2017, Timothy Trader began engaging in frequent trading in Canadian securities, with the intention of making profits on sales of shares. Below is a summary of purchases and sales of shares that he made in 2018:

Number Cost Sale price

Company of shares per share per share

Alogoma Steel 1200 $ 8.47 $ 7.48

Bell Canada 1500 46.88 55.75

Dominion Bridge 800 21.25 26.85

MacLean Hunter 1900 9.22 11.37

Rio Algom Mines 2300 15.25 13.50

Slater Steel 1250 10.00 8.20

Required:

1. Explain the tax implications of the above transactions as they relate to Timothy's 2018 personal income tax return. (Include the taxable amount of the effect!)

2. What advice would you give Timothy to help improve his tax situation?