The difference between TFSA losses and withdrawals

Only one of these affects your contribution room

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From the September/October 2015 issue of the magazine.

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Q: What happens if my TFSA investment goes from $36,500 to $0 in one calendar year? Does that mean I get that investment room back in my TFSA? – Tony Zhang, Montreal

A: I really hope this is a theoretical question. You know, like, what happens if you lick a metal pole in the middle of winter? If not you have my sympathies. That sucks. And I can see why you’d like to have that contribution back, to ease your pain a bit. Unfortunately, that isn’t the way it works, says CRA spokesperson Magali Deussing. “Investment losses within a TFSA are not considered a withdrawal and therefore are not part of a client’s TFSA contribution room. A client is still limited to the maximum contribution room,” and doesn’t gain that room back if losses are incurred.

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One comment on “The difference between TFSA losses and withdrawals

  1. Wow, I also hope it is a theoretical question, but the larger question is what on earth were you investing in to cause a 100% loss of value? It would appear to be a painful learning moment on the value of diversification and proper investigation of your investment options before committing money. Going forward, look at more mainstream investment options, and keep a balance of risk, geography and accessibility.


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