Can you write off losses in your TFSA?

[Super_Geo]

If you sell your TFSA stocks at a loss, can you claim the losses when you do taxes?

[Rarasaurus]

No you cannot claim capital losses out of a tsta.

[jwslam]

Ancient BUMP

Complicated question:

So I have a stock savings plan with my company where it buys xxx shares from my paycheque blah blah blah.

Using bs numbers:
So my average cost per share is $10 @ 1000 shares
Today's price it's trading at $5
So I transfer this $5000 worth of shares into TFSA, so technically I'm at $5,000 losses even though I may be selling the shares at $10+ in the future?

P.S. I don't need to hear about overcontributing because I'm well aware I'm not.

[BrknFngrs]

Originally posted by jwslam
Ancient BUMP

Complicated question:

So I have a stock savings plan with my company where it buys xxx shares from my paycheque blah blah blah.

Using bs numbers:
So my average cost per share is $10 @ 1000 shares
Today's price it's trading at $5
So I transfer this $5000 worth of shares into TFSA, so technically I'm at $5,000 losses even though I may be selling the shares at $10+ in the future?

P.S. I don't need to hear about overcontributing because I'm well aware I'm not.

Presumably the shares are sitting in a non-registered account currently?

If so, you'll trigger a deemed disposition on the transfer into the TFSA triggering losses of $5/share and your cost base within the TFSA will be $5/share going forward.

Edit: Removed comment re: deductibility until I can find a source.

[realazy]

^^WRONG DO NOT DO THAT

I believe that is considered a superficial loss, so you don't get any capital losses.

In order to book those capital losses, you need to wait 30 days before repurchasing the shares.

http://www.taxtips.ca/personaltax/investing/transfersharestorrsp.htm

Edited to add link

[BrknFngrs]

Good call realazy, specific issue is addressed on Page 9 of CRAs guide below:

http://www.cra-arc.gc.ca/E/pub/tg/rc4466/rc4466-14e.pdf

[Paul]

Transferring your shares, in-kind, will not trigger a capital loss for you to write off. If you were in a gain position, say they were trading at $20, you WOULD have to declare the gain.

[jwslam]

K well I had no intentions of selling the shares until I'm on gains anyways so moving it to TFSA while it's under is better than moving it in when I've already gained.

http://cdn.meme.am/instances/57916874.jpg

[riander5]

Originally posted by jwslam
K well I had no intentions of selling the shares until I'm on gains anyways so moving it to TFSA while it's under is better than moving it in when I've already gained.

http://cdn.meme.am/instances/57916874.jpg

Thats not a good way of looking at things

If your company handed you whatever you share value was in cash, would you put it into your company at 5$ per share?? If so keep it there.

If not pull it out and invest it somewhere else. Thats what i do with my companies shares :D

[Feruk]

Originally posted by jwslam
K well I had no intentions of selling the shares until I'm on gains anyways so moving it to TFSA while it's under is better than moving it in when I've already gained.
What you're proposing would basically cancel out thousands of dollars of tax write-offs for zero foreseeable benefit...

In your scenario, I see only 3 good strategies
1) do nothing, invest other money in TFSA
2) sell shares, have tax loss to write off against any future tax gains, move money into TFSA and re-buy stock AFTER the 30 days
3) sell shares, have tax loss to write off against any future tax gains, move money into TFSA and have option to immediately buy something else

One of the dumbest comments I hear from friends is "I'm down money on this stock, so I will hold it indefinitely until I at least break even." It makes no difference how much money you lost; all that matters is putting what's left of your money in the best possible place to MAKE money. When you lose 50%, it's probably because you're invested in a crappy company, so definitely not the best place for your money to make you more money. Unless there is something that has fundamentally made a company you're down on more investable, never chase your losses, you'll just lose more.

[roopi]

Originally posted by Feruk

One of the dumbest comments I hear from friends is "I'm down money on this stock, so I will hold it indefinitely until I at least break even." It makes no difference how much money you lost; all that matters is putting what's left of your money in the best possible place to MAKE money. When you lose 50%, it's probably because you're invested in a crappy company, so definitely not the best place for your money to make you more money. Unless there is something that has fundamentally made a company you're down on more investable, never chase your losses, you'll just lose more.

:thumbsup: :werd: :clap:

Fantastic advice right here. Cut your losses and move on in most cases. You have to learn how to lose occasionally.