Dear Nancy,
Can you help with this question? I have a cash account and a Tax-Free Savings Account. I have equities in the cash account. What is allowed as far as the rules go, if I want to "move" or "transfer" the equity position from my cash account into to my TFSA account as a contribution?
Thanks,
Dale
Dear Dale,
It should be relatively easy for you to move a holding, "in-kind", from your cash account and contribute into your TFSA. If the investment is in a capital gains position, be aware that you will have to declare it as a capital gain on your 2014 income tax return. If there is a capital loss, you will not be able to declare the loss. This is because the government sees you as still the beneficial owner of the security.
The amount of the contribution is the market value at the time of the transfer. It is not the adjusted cost base price (ACB).
It is best to seek the advice of your financial adviser before you make the contribution to ensure that you are fully aware of any tax liability and to make sure you are not over-contributing.
Nancy Woods is an associate portfolio manager and investment adviser with RBC Dominion Securities Inc. Visit her website www.nancywoods.com or send an email request to asknancy@rbc.com. You can send your questions to asknancy@rbc.com as well.
Nancy Woods