Log In
Register
Home
Topic RSS
Facebook
Twitter
Email this1:50 pm
December 29, 2018
Offline
Hi,
Say my brokerage TFSA account is empty and I transfer in, a position to TFSA from a margin account, what is tabulated TFSA wise, the book or the market value of the position? I would think it's the book, but I'm not sure.
Thank you
2:03 pm
October 27, 2013
Offline
Market value. In the eyes of the law, you have sold your position in your cash/margin account, and re-purchased it in the TFSA at market value. You pay taxes on the difference between book (ACB) value and market value if a gain. That said, you cannot claim the superficial loss if the transfer in market price is less than book (ACB) value.
2:12 pm
December 29, 2018
Offline
Wow, that was fast !
My book value is presently less than the market value (I register a loss). Therefore, when I transfer that position from margin to TFSA, CRA will assume my deposit from the market value, not the book, which in this case, is good for me.
2:33 pm
October 27, 2013
Offline
picassocat said
Wow, that was fast !
My book value is presently less than the market value (I register a loss). Therefore, when I transfer that position from margin to TFSA, CRA will assume my deposit from the market value, not the book, which in this case, is good for me.
If book (ACB) value is less than today's market value, you have a capital gain.
2:40 pm
December 29, 2018
Offline
AltaRed said
If book (ACB) value is less than today's market value, you have a capital gain.
My mistake, book is higher than market value, I register a loss.
3:04 pm
September 30, 2017
Offline
Is this considered an in-kind contribution ? If yes, I believe AltaRed already suggest the loss is not deductible. Why is it "good for you" ?
3:16 pm
October 27, 2013
Offline
Correct.
3:26 pm
September 11, 2013
Offline
I think you could first sell the shares to generate a capital loss to be applied against any other capital gains in the current or previous 3 years or forward against future capital gains, then transfer the cash to your TFSA, then buy the shares back in the TFSA account after 30 days. The risk would be the shares go up in price during the 30 days.
3:57 pm
December 29, 2018
Offline
Bill said
I think you could first sell the shares to generate a capital loss to be applied against any other capital gains in the current or previous 3 years or forward against future capital gains, then transfer the cash to your TFSA, then buy the shares back in the TFSA account after 30 days. The risk would be the shares go up in price during the 30 days.
Smart quote, but why wait 30 days to buy back?
4:48 pm
September 11, 2013
Offline
If you buy the same shares (that you just suffered a capital loss selling) back within 30 days that that's a "superficial loss" for income tax purposes, i.e. CRA won't let you claim the loss. Is my understanding.
5:17 pm
December 29, 2018
Offline
Thanks Bill !
5:25 pm
December 29, 2018
Offline
hwyc said
Is this considered an in-kind contribution ? If yes, I believe AltaRed already suggest the loss is not deductible. Why is it "good for you" ?
It's good for me in this way:
If I buy for 50,000$ in my TSFA, 50k goes towards my total with CRA.
If I buy 50,000 in my margin and I transfer that position after a capital loss of say 5,000$, only 45,000 goes towards my TFSA total, not 50,000. That is what I understand, correct?
6:30 pm
September 11, 2013
Offline
AltaRed said in post 2 above that you can't deduct a loss for income tax purposes triggered by transferring shares (in kind) to a tfsa. But, yes, if you transfer shares worth $45k that you had previously bought for $50k into a tfsa then you've used $45k of your tfsa contribution room.
5:26 pm
December 29, 2018
Offline
Another question, but in reverse:
If I have a position in my TFSA of book 5000$ / market 6000$. If I transfer this position out of my TFSA, what exactly am I transferring out, book or market amount?
5:37 pm
September 11, 2013
Offline
Market.
7:35 pm
December 29, 2018
Offline
Thanks for the quick answer Bill; it’s appreciated because I only have a few days left to reorganize my TFSA / Margin account to make my positions tax savvy. I'm probably not the only one, after all, it's that time of the year!
9:07 pm
February 16, 2013
Offline
picassocat said
...because I only have a few days left to reorganize my TFSA / Margin account to make my positions tax savvy.
Hello Picassocat,
I hate to be the bearer of bad news but the last trading date for 2020 for Canadian and US publicly traded stocks was today (Tuesday December 29th) in order to record the gain or loss in the 2020 taxation year.
10:26 am
September 11, 2013
Offline
My understanding:
If you buy shares for $1 in an unregistered account and later transfer them to your TFSA when their market value is $3 then you have used up $3 of your TFSA contribution room and you also have to report a taxable capital gain of $1 ($2 X 50%) that year on your tax return. (If the shares had instead declined to below cost you would not be able to claim a capital loss.)
If you later transfer them out of your TFSA back to a non-registered account when they are worth $4 you are considered to have made a $4 withdrawal from your TFSA and there are no income tax implications except your cost base is now $4 for any future transactions.
I stand to be corrected, but that's my understanding.
10:29 am
December 29, 2018
Offline
MG said
Hello Picassocat,
I hate to be the bearer of bad news but the last trading date for 2020 for Canadian and US publicly traded stocks was today (Tuesday December 29th) in order to record the gain or loss in the 2020 taxation year.
I just got off the phone with my broker and they told me that my transfer from my tfsa to my margin would be officialised before January first. Where are you getting the December 29th limit date?
Mind you, I'm not buying or selling anything, I'm just transferring positions out on my TFSA to a margin account before January first. The amounts transferred should create equal space for 2021 tfsa contributions, as long I exit my TFSA before or at years end. That is the way I understand CRA-TFSA rules.
Please write your comments in the forum.