August 28, 2013
Aha! Since there are smart people who know how to make a buck, pretty-face Stephen's cronies want everybody to be the same? Enjoy fantastic interest rate of 1% and shut-up-fee-up!
September 11, 2013
Nothing new, no change from previous thread here re this, CRA is auditing hundreds of the millions of TFSAs so no worries for anyone here - feel free to invest in stocks, etc all you want, they're only after the few very frequent traders who are operating a security trading business within a TFSA, i.e. no problem if you bought some penny stocks and you hit the jackpot on some. (If Mr Harper is defeated will CRA auditors then be Thomas's or Justin's cronies? And as Justin seems particularly to dislike TFSAs maybe you ain't seen nothing yet!)
October 21, 2013
It brings no comfort to think that Big Brother has nothing better to do than delve into the details of people's TFSAs.
We are always told that there is a risk-reward ratio. If you want bigger rewards (along with the possible losses), you must take bigger risks. Or so the story goes. Except in the case of TFSAs, where there is some sort of ceiling on how risky you can be, but nobody can tell you what it is exactly, until after you've exceeded it. This may end up penalizing inexperienced investors more than those who know what they are doing. There are lots of people out there who would be happy to sell risky investments to naïve people.
The argument goes that because it's a Tax-Free SAVINGS Account, that people should not be investing in very risky products. However, they'd likely be doing it regardless of what kind of account it was if that's their perspective on investing. Again, the inexperienced will likely take the hit, either from outright losses (in which case there is no further penalty) or from CRA. If the gov't were truly concerned about people's SAVINGS not being lost, they would restrict the kinds of investments that can be made within TFSAs in clear language and penalize any financial institutions that permit people to invest in them. That way, people would be protected from big losses. However, this will never happen because, the way it is now, CRA profits when the riskier behaviours pay off.
The previous thread went into the whys and wherefores in some detail, so there is no point in arguing about it. Any government will likely do the same, no matter who is in power. Trudeau has noted that increasing TFSA contributions helps those who need it least, so has said he will bring contribution levels back to where they were. We'll see. It's always different AFTER the election, no matter who it is. The first thing that ANY newly elected government always says, about a month after they win, is that they've now examined the books and have discovered that things are much worse than they had been led to believe, and therefore the budget will have to be tighter than anticipated. I've heard this so many times that I can practically set the clock by it! I also think it's probably true, because it's always in the interests of the party in power to make things look rosier than they are when approaching an election.
This issue doesn't affect me personally because I don't have the stomach for anything risky, but it will hit people who are inexperienced and just got lucky - or thought they did before CRA found them.
If you can truly afford to take such risks, the wiser more experienced investor would almost certainly do it through non-registered accounts where he can claim capital losses when it doesn't work out. If you lose it in a TFSA, well, it's just gone forever and there is no compensation and you can't replace it.
September 11, 2013
Let's try and stay on point here:
1. CRA is looking into a few hundred (probably in the industry) high frequency traders. A few hundred out of millions of accounts.
2. This has zero to do with either "inexperienced investors" or the riskiness of investments. It is the FREQUENCY (the "churn") of buying and selling, the possibility that this constitutes business activity, that is drawing attention. If you're been a day trader of BMO stock PERHAPS you're not an investor, you MAY be operating a trading business. If you buy and sell penny stocks occasionally and some hit the jackpot, you're still an investor (a risk tolerant one, perhaps) and that's NOT what we're talking about here, you're good to go. (And, yes, I know it's a cruel world where some authority figure won't tell us what the specific number of trades threshold is.)
3. There is no "ceiling" for TFSAs. CRA routinely looks at these types of activities, it is not only (media attention notwithstanding) related to TFSAs. CRA's attention naturally is being drawn to TFSAs where high balances indicate trading activity MIGHT be going on.
4. "CRA profits"? Trust me, CRA does not get to keep the money they find, it goes into the Treasury where the money is used for the citizens of Canada. (Note that CRA and "the government" are two separate entities, one is a law enforcement agency, one is who we elect.)
5. Complaining about politicians? Go for it, if it makes you feel better!
October 27, 2013
I am will Bill on this one. Media hype has blown this out of proportion time and time again. It is the Trading Businesses they are trying to uncover, perhaps a few hundred accounts, likely primarily owned and operated by professionals in the industry. Zzzzzzzzzzzz......
P.S. I am a taxpayer. I want them to contribute their fair share to the General Ledger and not get away with abuse of the law.
October 21, 2013
October 27, 2013
Perhaps it makes some people "feel better" to use sarcasm to dismiss the insights of others.
Not sure to whom your comment is directed but I see no sarcasm. Way too many 'talking heads' and 'industry' types needing continued headlines have used this 'issue' to misrepresent the issue and further their own agendas.
It is ultimately those (likely) financial professionals who are in the business who should not be abusing a 'personal' plan designed to augment retirement income to hide business income. Not really different than the income trust issue of several years ago, e.g. the likes of BCE, etc. attempting to convert.
April 6, 2013
The previous discussion on this site that Bill mentioned is CRA targeting successful TFSA investors. There's more substance there than in that uncritical Financial Post article from Gary Marr. Topics of investing versus speculating, intent, and adventures in the nature of trade were discussed.
By leaving out part of the truth, the Financial Post article suggests that CRA is on a witch hunt, pursuing people who are fortunate enough to have very high TFSA balances, with seemingly no legal basis. I guess that's what the respondent's tax lawyers would like us to believe.
There's no mention of an inconvenient fact that CRA may be just doing their job and enforcing limitations in subsection 146.2(6) of the Income Tax Act. That subsection specifically says that gains from business activities in a TFSA are not tax-free. See my post in that discussion.