Canada Tax Question

[beerbaron]

I'm sure there is a knowledgeable person on this board that can shed some light on this question: If I have some share that have lost value and are held into a margin account can I sell them into the margin account to have the tax loss and buy into a TFSA the same amount of shares?

 

Thanks

BeerBaron

[RichardGibbons]

No.  Your TFSA is considered an affiliated person.

 

http://www.theglobeandmail.com/globe-investor/investor-education/your-tax-rrsp-questions-answered/article4083027/

 

 

[rb]

well it's abit more complicated. Yes, your capital loss is a superficial loss and you cannot claim it right away. But when you liquidate your position (assuming at a gain) you can claim the loss and won't be taxed on the gain. So you're basically deferring the loss, but ur still entitled to it.

[Bog]

I was looking to fill some tfsa room the other year and my brokerage account would not let me sell my Fairfax shares in my non registered and buy the same amount in my TFSA as they considered this front running. I was able to buy the Fairfax shares the next day at a few dollars higher then what i sold in my non reg account.

 

This year i was moving some non reg money into the tfsa and i just transferred the shares into my tfsa. So the non reg account was still a disposition as I was moving from non reg to tfsa.....but i did not have to buy and sell the shares. Though i do not know the answer to your question, you may be able to just do a transfer.

[SharperDingaan]

Just so that you know ......

 

TFSA's were not designed for withdrawals greater than the lifetime contribution limit. Most everyone will not allow a withdrawal >  the lifetime contribution limit (unless you're dead); even if you have well over that amount in the TFSA. (because you invested wisely).

 

SD

 

 

 

[Bog]

This is terrible if this is true. What is the point of having this account then?

 

Just so that you know ......

 

TFSA's were not designed for withdrawals greater than the lifetime contribution limit. Most everyone will not allow a withdrawal >  the lifetime contribution limit (unless you're dead); even if you have well over that amount in the TFSA. (because you invested wisely).

 

SD

[ourkid8]

I don't think this is correct.

 

Just so that you know ......

 

TFSA's were not designed for withdrawals greater than the lifetime contribution limit. Most everyone will not allow a withdrawal >  the lifetime contribution limit (unless you're dead); even if you have well over that amount in the TFSA. (because you invested wisely).

 

SD

[SharperDingaan]

I don't think this is correct.

 

Just so that you know ......

 

TFSA's were not designed for withdrawals greater than the lifetime contribution limit. Most everyone will not allow a withdrawal >  the lifetime contribution limit (unless you're dead); even if you have well over that amount in the TFSA. (because you invested wisely).

 

SD

 

All contributions/withdrawals to/from the TFSA are recorded, & the individual reports it in their annual tax return. As a withdrawal this year does not increase your contribution room until next year; both the taxman, & your FI, will discourage you from using the TFSA as a tax free chequing account.

 

Withdraw 50K when the life-time limit to date is 46.5K, & you will meet resistance. The FI would rather not have the exposure of a potential rule violation - & recommend delaying until Jan-01 (when the limit will be 51.5K). The taxman will also not give you extra lifetime credit for the extra 3.5K (46.5-50) withdrawn.

 

SD

[SafetyinNumbers]

Do you have a source for this information because I don't believe it's true nor can I find any evidence to support it. Say what you want about how high taxes are in Canada but the rules ar usually quite logical.

 

Also, contributions and withdrawals from your TFSA are not recorded anywhere on a Canadian tax return. If you have evidence of this as well, please provide it.

[rb]

I don't think this is correct.

 

Just so that you know ......

 

TFSA's were not designed for withdrawals greater than the lifetime contribution limit. Most everyone will not allow a withdrawal >  the lifetime contribution limit (unless you're dead); even if you have well over that amount in the TFSA. (because you invested wisely).

 

SD

 

All contributions/withdrawals to/from the TFSA are recorded, & the individual reports it in their annual tax return. As a withdrawal this year does not increase your contribution room until next year; both the taxman, & your FI, will discourage you from using the TFSA as a tax free chequing account.

 

Withdraw 50K when the life-time limit to date is 46.5K, & you will meet resistance. The FI would rather not have the exposure of a potential rule violation - & recommend delaying until Jan-01 (when the limit will be 51.5K). The taxman will also not give you extra lifetime credit for the extra 3.5K (46.5-50) withdrawn.

 

SD

 

I'm sorry but this is just flat out wrong.

 

1. You're allowed to withdraw any amount at any time even if it is over lifetime limit. Most institutions will have no problem with this. SD, if yours does maybe you should move your business elsewhere.

 

2. Any amount you withdraw gets added to your contribution limit next year. If your withdrawal is over the lifetime limit you do not loose any contribution space as SD suggested.

 

3. You do not have to report TFSA deposits and withdrawals on your tax return. Your FI reports the transactions to CRA. The penalties for over contributions are pretty stiff and you will receive a notice of assessment from CRA.