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TAX FREE SAVINGS ACCOUNT SECTION
2/23/2017 5:57:58 PM
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By Gordon Pape | Monday, June 01, 2015

BUILDING WEALTH WITH GORDON PAPE


Tax-Free Savings Accounts (TFSAs) have become immensely popular since they were launched in 2009. And now, with the increased annual contribution limit of $10,000, they are even more so. One of the reasons may be that they are extremely flexible – they can be used for any purpose from building emergency savings to stock market day trading (although the tax people may come calling if you’re too successful at that). That’s why there is no one-size-fits-all model TFSA portfolio. How you invest depends on your objectives and your time horizon. So the Internet Wealth Builder Aggressive TFSA Portfolio that I launched in March 2012 is definitely not suited for everyone. It is intended for readers whose goal is to maximize tax savings by investing in a small, low-cost portfolio of domestic and international ETFs. Here's a re-cap.

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By Robyn K. Thompson | Friday, April 24, 2015

Q – The 2015 federal budget raised the annual TFSA contribution limit to $10,000. I’ve already contributed $5,500 this year, so does that mean I can contribute another $4,500 this year? And how does this affect future contribution room? – Meli M., Markham, Ontario

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By Robyn K. Thompson | Friday, August 22, 2014

Q – I’ve heard that a Tax-Free Savings Account is a good way to set aside money for things like a down payment on a home or a new car. But I’m not sure I really understand what makes it such a good deal. Can you explain? – Steve Y., Toronto, Ontario

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By David West | Tuesday, January 22, 2013

When Tax-Free Savings Accounts (TFSAs) were introduced in 2009, they were billed as the best thing to happen to Canadian investors since the RRSP, which was first introduced in 1957. That’s rather heady hype in and of itself, but in the end that statement was warranted. In my opinion, used properly, TFSAs are an excellent investment container for holding a portion of your investment portfolio, and every Canadian should consider using one as part of their overall investment strategy. But what to put into it? That’s where things get a little prickly.

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By Robyn K. Thompson | Monday, December 17, 2012

Q – I am 76 years old and earn the maximum amount of money allowed through my retirement pension before the Old Age Security clawback. I would like to withdraw money from my investments to travel with my wife and do not want to face any clawbacks or tax consequences. Which account should I withdraw funds from to achieve my goal: my cash account or my Tax Free Savings Account? – Jack S., Toronto, Ontario

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By Doug Nelson | Monday, December 17, 2012

During RRSP season, the question always arises: Is it better to contribute to an RRSP or a TFSA? Ideally, both should be maximized each year, and both are part of a long-term wealth building plan. But if you really must choose between one and the other, you’ll need to do some number crunching. So with that in mind, let’s see which savings plan is likely to win the retirement income sweepstakes.

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By Robyn K. Thompson | Friday, October 26, 2012

Q – Should I open a Tax-Free Savings Account if I have not yet maxed out my RRSPs? – Tim B., Oakville, Ontario

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By Doug Nelson | Thursday, February 16, 2012

During RRSP season, the question always arises: Is it better to contribute to an RRSP or a TFSA? Ideally, both should be maximized each year, and both are part of a long-term wealth building plan. But if you really must choose between one and the other, you’ll need to do some number crunching. So with that in mind, let’s see which savings plan is likely to win the retirement income sweepstakes.

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By David West | Thursday, February 09, 2012

Safety. Every investor wants an element of safety in their portfolio. But ask an investor to define “safety” and that’s where the difficulty begins.

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By Robyn K. Thompson | Thursday, February 09, 2012

Q – I am 76 years old and earn the maximum amount of money allowed through my retirement pension before the Old Age Security clawback. I would like to withdraw money from my investments to travel with my wife and do not want to face any clawbacks or tax consequences. Which account should I withdraw funds from to achieve my goal: my cash account or my Tax Free Savings Account? – Jack S., Toronto, Ontario

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By David West | Friday, February 11, 2011

I’m not a gambler. I don’t play the ponies, I’ve never been to Vegas, and I don’t do ProLine. But I do know what a “trifecta” is, and trifecta seems to be the perfect word to summarize this article.

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By Alan Rowell | Monday, February 07, 2011

You are about to become the target of the annual February ritual – the battle for your Registered Retirement Savings Plans (RRSP) contributions. RRSP contributions are the most widely known and consistently beneficial way to defer your current income taxes until retirement, when you will qualify for the additional exemptions that come with age.

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By Gordon Pape | Thursday, December 30, 2010

Q – When transferring equities in kind from a non-registered account to a TFSA, is capital gains tax payable if the value of the equities is greater than the cost base? I understand that there is no provision for claiming a capital loss if the cost base is more than the value of the equity transferred. Therefore I assume that there is no capital gain when the cost base is less. Am I correct? – John W., Calgary, Alberta

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By Gordon Pape | Monday, December 27, 2010

Q – Are losses within a Tax-Free Savings Account re-contributable in the same way as withdrawals, i.e., in the following year? For example, suppose I was to invest $15,000 in my TFSA account (assuming that’s my limit in 2011) entirely in call and/or put options and they all expired worthless. Could I then contribute a maximum of $20,000 to my TFSA in 2012 ($15,000 in losses plus $5,000 in new contribution room)? – Jim E.

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By Gordon Pape | Friday, December 24, 2010

Q – I am a follower of your newsletter and have read your TFSA books with great interest. My wife and I are both nearly 50 years old and have approximately $200,000 to invest. I currently have $180,000 in an RRSP, and she has about $230,000 in her RRSP. We both have remaining RRSP contribution room, hers being about $40,000 and mine less than $10,000. We also have an emergency fund of $50,000, which is in a high interest account should one of life’s surprises present itself.

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By David West | Wednesday, December 22, 2010

Ever since the advent of the Tax-Free Savings Account, or TFSA, I’ve been quite dead set against investors putting anything other than cash and cash equivalents into one of these neat little containers. However, as 2010 comes to a close, I’m open to rethinking that position a little bit. It’s one New Year’s resolution I might be able to keep.

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By Gordon Pape | Wednesday, December 15, 2010

Q – If I withdraw funds from my investment account from time to time, are they taxable? Also, if my adult children withdraw funds from their investment accounts and in turn give those funds to me, are they taxable or considered as a gift? – Lynda H.

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By Gordon Pape | Thursday, December 02, 2010

Q – I would like to invest in dividend-paying foreign companies (not U.S. or Canadian) trading on American exchanges as American Depositary Receipts (ADRs) and keep those investments in a Tax-Free Savings Account (TFSA). My first question is whether I will pay any taxes. The second question is how to calculate the exact amount of contribution per year, since I will have to purchase them in U.S. dollars. For example if the maximum contribution per year is C$5,000 and the exchange rate is C$1=US$0.95 for that day, does it mean that I am allowed to contribute only $5,000 x 0.95 = US$4,750. – Mike S.

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By Gordon Pape | Wednesday, December 01, 2010

Q – This year the value of my Tax-Free Savings Account (TFSA) has grown by $2,000. If I transfer $2,000 from my TFSA to a Registered Retirement Savings Plan (RRSP) before the end of the year, will I get a tax credit for the $2,000 RRSP contribution? Also, will I be able to contribute an additional $2,000 into my TFSA next year? – Mike M.

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By Gordon Pape | Friday, November 19, 2010

Q – Which is wiser: to invest my Tax-Free Savings Account (TFSA) in the stock market or in guaranteed investment certificates (GICs), since I’m close to 65 years old. – George N.

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