GREY:XEBEQ - Post by User
Comment by
fogduckkeron Jan 06, 2021 7:20pm
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Post# 32238940
RE:TFSA
RE:TFSANewtrader1982 wrote:
if you turned 50k into say 300k in your TFSA then withdrew say 250k is it true that the following year your contribution room would be increased by the amount you withdrew plus any yearly increases. Or is the contribution room capped at whatever the total amount is to date since starting. Someone trying to tell me you can supersize your contribution room this way but seems sketchy to me. I looked on cra and it does say whatever your withdrawals are will be added to your contribution room. Confused now.
It is true that your contribution room would increase the FOLLOWING year. But do be careful with this as it will raise red flags on your TFSA account with the CRA. There have been cases where the gains in a TFSA have been deamed to be income and not tax free. If the CRA deems that you are using the account for trading as opposed to investing then be prepared. The CRA does not have an exact definition of trading for income verses investing. Like they will take into account the number of trades, the type of stocks, your investment knowledge. I have heard from some people with good accounting backgrounds that $250,000 is the threshold that gets their attention. Don't overtrade your TSFA or at least don't make a lot of money trading.