[BethO]

Hi there,

I have opened up a TFSA account at TD, and plan to transfer some stocks from my TD brokerage account into the TFSA account.

Is it more advantageous for me to transfer a stock which has lost value since I purchased it (down about 50%) into this TFSA account, or a stock which has gained value since purchase?

I believe I read somewhere that when you transfer into the TFSA it is treated "as if" it were sold, however you aren't able to declare a capital loss on it? Is that correct?

Thanks in advance for your input.

BethO

 

[msj]

Yes, you can't claim any capital losses when you transfer stocks from your non-registered account to your TFSA.

You will, however, have to pay tax on any capital gains if you transfer any winners over.

Try and keep your US dividend earning stocks out of the TFSA - they belong either in a RRSP (where the 15% withholding tax is not deducted by virture of it being a "retirement" account under the CAN/US tax treaty) or even in a non-registered account where you will be able to claim any withheld taxes as a foreign tax credit (generally the preference is in the RRSP since income from foreign dividends is taxed like interest income - i.e. you don't get any dividend tax credits so the reduced tax rates for dividends do not apply).

Ideally, though, you would keep your foreign dividend earning stocks in your RRSP (assuming they're there more so for earning income than large capital gains) and any interest earning investments in either your RRSP and/or TFSA.

Then, assuming you have enough in savings to justify this, you would put your expected capital gains investments (with little to no dividends being paid out) in your TFSA (if/when you have the room) and/or in a non-registered account.

 

[Rickson9]

Hi there,

I have opened up a TFSA account at TD, and plan to transfer some stocks from my TD brokerage account into the TFSA account.

Is it more advantageous for me to transfer a stock which has lost value since I purchased it (down about 50%) into this TFSA account, or a stock which has gained value since purchase?

I believe I read somewhere that when you transfer into the TFSA it is treated "as if" it were sold, however you aren't able to declare a capital loss on it? Is that correct?

Thanks in advance for your input.

BethO

You should transfer the stocks that have the strongest financials selling at the lowest price to maximize your opportunity for tax-free appreciation.