Tax Free Savings Account
- Thread starter Bootsie
- Start date
Quote from questrade's site:
You can contribute up to $5,000 per year. Your unused contribution room can be carried forward from year to year. If you make a withdrawal, your contribution room will increase in direct proportion to the amount you take out. For example, if your initial contribution of $5,000 goes up in value to $6,000 and you withdraw the entire amount, your contribution room for the following year will be $6,000 plus the annual contribution amount of $5,000, for a total of $11,000.
I hope this is accurate, because it sounds pretty good if it is. Also I can't find any info on the thinkorswim website saying they'll offer it anytime soon.
You can contribute up to $5,000 per year. Your unused contribution room can be carried forward from year to year. If you make a withdrawal, your contribution room will increase in direct proportion to the amount you take out. For example, if your initial contribution of $5,000 goes up in value to $6,000 and you withdraw the entire amount, your contribution room for the following year will be $6,000 plus the annual contribution amount of $5,000, for a total of $11,000.
I hope this is accurate, because it sounds pretty good if it is. Also I can't find any info on the thinkorswim website saying they'll offer it anytime soon.
Has anyone started paying the overcontribution penalties yet? I would just like to know how it works? Do you pay monthly or just at year end with your taxes? Has anyone tried a large overcontribution amount ($100k+)? Any troubles? I am anxious to move more of my trading into the TFSA. So far it seems like questrade is the broker to beat for trading the TFSA. Any other suggestions?
I'm running mine through Questrade. Their platform is crap and took time getting used to... but it's statisfactory. I"ve overcontributed - the penalty is 1% permonth. I let my accountant know how much I've overcontributed. I gotta tell you, I can't believe the Can. Gov't let this happen. It's easy money and is tax free.
I was reading somewhere on RBC's site [which I DO-NOT recommend to anyone as a brokerage] that the capital gains are also taxed at 50%? [IIRC].. I'm waiting for someone else to experiance this before I go overboard..
It means only half the gain is taxed, not the gain is taxed at 50%
http://en.wikipedia.org/wiki/Capital_gains_tax#Canada
So, here we are... 1 year later. I started out with an overcontribution and will not deposit any more funds... probably ever. My penalty will drop now on a monthly basis. In hind site, it would have been easier to just put in the 5k and not 25k but whatever... it was easier to work with. The trading has been unreal and all tax free. (This account has been more of a "buy and hold" to swing trading styles... I have not yet closed my overnight account but could see that as a possibility somewhere down the road. The obvious disadvantage is the lack of opportunity (shorting and futures) but even then, the 3x etf's can give you as much fun as you can handle.
Would like to know if there are others out there that have done well or are pushing this account...
Best,
B
http://www.fin.gc.ca/n08/09-099-eng.asp
Under the proposed amendments, any income reasonably attributable to deliberate overcontributions will be made subject to the existing advantage rules (as described above) and taxed accordingly. Pursuant to the advantage rules, the tax payable on the income will be 100%.
.. It is proposed that these measures apply to transactions undertaken after today's date. Withdrawals of amounts related to transactions occurring on or before today's date will be governed by the existing rules.
This loophole is likely closed, as of Oct 16
Under the proposed amendments, any income reasonably attributable to deliberate overcontributions will be made subject to the existing advantage rules (as described above) and taxed accordingly. Pursuant to the advantage rules, the tax payable on the income will be 100%.
.. It is proposed that these measures apply to transactions undertaken after today's date. Withdrawals of amounts related to transactions occurring on or before today's date will be governed by the existing rules.
This loophole is likely closed, as of Oct 16
thx miscsales
"The Government of Canada has become aware that in certain situations, and subject to the existing anti-avoidance rules in the Income Tax Act, some TFSA holders are attempting to generate a rate of return on deliberate overcontributions over a short period of time sufficient to outweigh the cost of the 1% tax. On its introduction, it was not anticipated that the TFSA would be subject to this type of deliberate overcontribution."
Interesting... like I said in the OP, I can't believe the Gov't has actually let this slide. LOL. This is almost like their admitting an error...
"Under the proposed amendments, any income reasonably attributable to deliberate overcontributions will be made subject to the existing advantage rules (as described above) and taxed accordingly. Pursuant to the advantage rules, the tax payable on the income will be 100%."
So, now they have to define income...