Tfsa!

[liquid1010]

I'm suprised this has not been mentioned yet. For those who actually do more with their money than just spend it, this is a great concept.

http://www.cbc.ca/news/background/budget2008/pdf/tax-free-savings-account.pdf

Any ideas on what what, if any, restrictions are placed on the investments you can hold within your TFSA?

[Mckenzie]

Originally posted by liquid1010


Any ideas on what what, if any, restrictions are placed on the investments you can hold within your TFSA?

I think this is the question.

If there are heavy restrictions on the investments I see it more of a joke than anything...sounds like its gonna be low rate GICs, etc.

[BigMass]

Originally posted by liquid1010
I'm suprised this has not been mentioned yet. For those who actually do more with their money than just spend it, this is a great concept.

http://www.cbc.ca/news/background/budget2008/pdf/tax-free-savings-account.pdf

Any ideas on what what, if any, restrictions are placed on the investments you can hold within your TFSA?

So what exactly can you invest in from this account? Nothing is specified. Stocks, bonds, funds?

Sounds like another bureaucracy. All capital gains should be tax free period.

[BigMass]

Originally posted by Mckenzie


I think this is the question.

If there are heavy restrictions on the investments I see it more of a joke than anything...sounds like its gonna be low rate GICs, etc.

it will probably be a joke just like RRSPs are a joke.

[Mckenzie]

Originally posted by BigMass


it will probably be a joke just like RRSPs are a joke.

Well I somewhat disagree with RRSPs. At least they can be used to reduce your immediate tax burden and all income accumulates tax free. You could make a $100 million and not pay tax for many years. I guess the point of the RRSP is to FORCE you to take the money out when your income is much much lower, ie. at the lowest marginal rate rather than being taxed at a higher rate during higher income earning years. :dunno:

[liquid1010]

Unless you are in an extremely low tax bracket, I would hardly consider RRSP's to be a joke.

I would presume they will run the tfsa much the same way as an RRSP, which is fine by me considering I do mine self administered anyways. They haven't stated to the contrary, so one would think you could hold most things in the tfsa, including RE, 2nd Mortgages, equities, etc...

[Canmorite]

Interesting. Need to research it more...

[static.b]

"The new accounts will allow investors to hold assets including cash, stocks and bonds without paying taxes on income from dividends, interest and capital gains." -http://www.bloomberg.com/apps/news?pid=20601082&sid=aaeJhyAOTiT4&refer=canada

This is huge news for any Canadian wanting a tax shelter for their investments. On March 5th this budget gets voted on in the house of commons. Can't wait

[icecreamvan]

hello legalized money laundering.

[Mckenzie]

Originally posted by static.b
"The new accounts will allow investors to hold assets including cash, stocks and bonds without paying taxes on income from dividends, interest and capital gains." -http://www.bloomberg.com/apps/news?pid=20601082&sid=aaeJhyAOTiT4&refer=canada

This is huge news for any Canadian wanting a tax shelter for their investments. On March 5th this budget gets voted on in the house of commons. Can't wait

I just got this:

http://www.ey.com/Global/assets.nsf/Canada/Tax_Alert_2008_No_4/$file/TaxAlert2008No4.pdf

Check out page 4- it sounds like the same investments eligible as an RRSP. :thumbsup:

[Rav4Guy]

Starting in 2009, individuals age 18 and over who are resident in Canada can contribute up to $5,000 annually to their TFSA. Individuals will want to review their retirement savings strategies to ensure they have an appropriate mix of TFSAs and RRSPs. Key features of these new plans are as follows:



· Contributions to TFSA will not be deductible.

· Withdrawals will be tax-free.

· Income, losses and gains on investments in the account, as well as amounts withdrawn, will not be taxable, and they will not be taken into account for determining eligibility for certain income-tested benefits or credits.

· The $5,000 annual contribution limit will be indexed to inflation in $500 increments for 2010 and later years.

· Unused contribution room can be carried forward indefinitely.

· Amounts withdrawn in a year will be added to the following year’s contribution room, allowing individuals to re-contribute the equivalent of withdrawn amounts in future years.

· TFSAs will generally be allowed to hold the same qualified investments as Registered Retirement Savings Plans (RRSP), except for investments in non-arm’s length entities (including entities of which the account holder is a “specified shareholder” or has an interest of 10% or greater, together with non-arm’s length persons).

· Interest on funds borrowed to invest in a TFSA will not be deductible. TFSA assets can be used as collateral for loans.

· The attribution rules will not apply to TFSA contributions made to spousal plans (subject to the spouse’s contribution room) or on the income generated by such contributions.

· On the death of an account holder, investment income earned in the TFSA after death will no longer be tax-exempt. The TFSA assets will be transferable to the TFSA of the surviving spouse on death.

· Individuals who become non-resident can maintain their existing TFSA and continue to be exempt from tax on investment income and withdrawals. While non-resident, however, no new contributions will be permitted and no new contribution room will accrue.

[T78Supra1]

RSP's Are not a joke however they should never be bought to differ tax.....This is money making marketing done by the banks.


Say you put away 10,000 to differ 3,000 or so of tax. Right now say you are at the highest tax bracket approx. 40%.

Do you really think that in 20 years it will still be at 40%.If you take it out before retirement you could be paying 60% tax instead of the 40% that you tried to differ.

However If you say I will take it out at retirement and say you now have over a million (Which all the banks promise) Now you will want to avoid paying a tax so the bank puts you on a payment plan. Chances are you will die before you take all your money.
Personally I would rather pay my tax due at 40% which is $3000.00 take my $7000.00 and invest that.

RSP's Are really a great Idea if your wife is thinking of getting pregnant in the future. Because that way you get a tax break and when your wife is on mat leave she can cash them in a lower tax bracket.


Anyway to to each his own just my thoughts