Of course it is legal. I paid into the TFSA of my wife- and could to non-relatives. This means that you are gifting the money to them.Is this legal?
I've read that it's legal to contribute to your spouse's TFSA...but what about other family members, like parents, siblings, in-laws or even non-relatives?
You can loan money to anyone- with or without interest. The interest you receive is a capital gain and you will have to file it as an income in your tax return.Hmm okay.
What about "loaning" a parent cash that they put in their line of credit or whatever, and having them pay me the interest they would have paid the bank?
Same issues as with the TFSA or different?
Read up on the formula for how TFSA contribution room is calculated. If you sell the stocks, and take the money out of the TFSA, you can put it all back into the TFSA the following calendar year. But in your original statement you talked about selling the stock and reinvesting it, not taking any of it out of the TFSA.but they say you can withdraw from the account, use it for another purpose then return years later. I guess this is only up to $5000 per year not for any gains?
Also, since the gains are tax free doesn't it make sense if you, say have 100k to invest and decide to invest 90k conservatively and 10k with some risky stocks, and so to use the TFSA for the stocks? In the hope of high gains, thus avoiding high capital gains tax, particularly in the future when people TFSA become high?
Thanks OGG, but what is the definition of arms length. I looked up the tax code and I could not find a definition of the term.You could get caught by s. 56(4.1) of the Income Tax Act if CRA decides you are making a loan to someone not at arms length, rather than a gift. This is a general tax avoidance rule, that doesn't address TFSAs specifically.