Post by
majortom75 on Nov 13, 2024 12:32pm
TFSA hack!
This is a risky move and is not investment OR tax advice. Consult a professional before making any investment or tax planning decisions.
When you make an "in kind" contribution from a non-registered account to a TFSA account held at the same institution, the contribution happens at the closing price of the PREVIOUS DAY!
Caveats: it is a deemed disposition in the taxable account. You will need to calculate the capital gains from the time of purchase to the closing price of the previous day.
If you have a capital loss, you MAY NOT claim it.
You MUST have the TFSA contibution room = # of shares X the closing price of the previous day.
The shares need to have settled in your taxable account.
Example:
buy 150,000 shares of BABY today at $0.035 ($5250)
Tomorrow, if we're extremely lucky, BABY opens at $0.10. I call my broker and tell them I want to make an "in kind" contribution of 150,000 shares of BABY from my taxable account to my TFSA. I confirm that I understand the tax implications and that I have sufficient contribution room.
When the shares show up in my TFSA, I can sell them, hopefully still at $0.10 or better. The entire gain is tax free.
If the earnings are a nothing-burger, I can keep or sell the shares in my taxable account instead of transferring to my TFSA and wait for the next opportunity.
Again, not investment OR tax advice. Consult a professional before making any investment or tax planning decisions.
Any thoughts? Anyone try this and get slapped by the CRA?