# Transferring stock in kind to Tfsa



## Money172375 (Jun 29, 2018)

Hello,

Most of my blue chips that I bought this year in a non-reg account are down. No big deal. 

Does it make sense to transfer them in kind to my tfsa in January? I understand you can’t claim the capital loss.......and you lose this ability if they had remained in a non-reg account. I plan to hold forever and am only interested in the dividends and moderate growth (banks, utilities, telcos). 

Seems like a good strategy to shelter $6000x2 for me and my spouse. 

Thoughts? Any downsides?


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## m3s (Apr 3, 2010)

Aelk799 said:


> Most of my blue chips that I bought this year in a non-reg account are down. No big deal.


1. Sell before Dec 31 for tax loss harvesting (you can carry forward for future capital gains if you don't have any yet) 

2. Put the cash in TFSA after Jan 1 2019 (don't over contribute)

3. Wait 30 days after sale in 2018 (avoid superficial loss rule)

4. Repurchase similar dividend paying blue chips in TFSA or the same after 30 days (if you sold a bank just buy another bank etc)

5. Prosper


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## humble_pie (Jun 7, 2009)

m3s said:


> 1. Sell before Dec 31 for tax loss harvesting (you can carry forward for future capital gains if you don't have any yet)
> 
> 2. Put the cash in TFSA after Jan 1 2019 (don't over contribute)
> 
> ...




alas the last day for 2018 tax loss selling has already passed. It was december 27th. Stock has to settle in 2018.

afaik taxpayer should be careful about tax loss sales before TFSA contributions. Evidently the rules recite that tax loss before TFSA contrib won't be recognized as a taxable loss, so be careful to buy a completely different stock in TFSA with any cash that gets contributed. 

if buying a wholly different stock, it's not necessary to wait 30 days


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## agent99 (Sep 11, 2013)

Aelk799 said:


> Seems like a good strategy to shelter $6000x2 for me and my spouse.
> 
> Thoughts? Any downsides?


Using the TFSA, is something we should all do. No reason not to have dividend payers in TFSA. And if you need the money, you can withdraw without tax or penalty. From tax viewpoint TFSA is also a good place for fixed income that would attract full tax rate if in taxable account. Also for REITs, and some other equities/funds, that pay ROC (return of Capital) that in taxable account reduce ACB which in end results in higher capital gains. RRSPs should also be used to their fullest, but probably after TFSA. But that's another subject.

We always contribute cash. Mainly because it is easy to do on-line at BMOIL. Saves waiting on hold for minutes/hours/? in January! 
But also because you can only buy an odd-lot of say, a big bank share for $6000. Tax Loss selling may be over for this year, but if you sell in January, may help for 2019, if you foresee any capital gains.


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## heyjude (May 16, 2009)

In 2019 I transferred some of my Canadian stocks in kind from my Canadian margin account at TD to my TFSA at TD. The reason I chose this method was that I didn’t have any spare cash on hand to put in the TFSA. It makes sense to me, and I plan on doing the same in January 2019, if I can find enough of them without a loss!* One caution is not to add US stocks, as dividends on these will be taxed. 

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

* I’ve just looked. Most of my stocks have gained as I have held them for a long time.


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## agent99 (Sep 11, 2013)

heyjude said:


> In 2019 I transferred some of my Canadian stocks in kind from my Canadian margin account at TD to my TFSA at TD. The reason I chose this method was that I didn’t have any spare cash on hand to put in the TFSA. It makes sense to me, and I plan on doing the same in January 2019, if I can find enough of them without a loss!* One caution is not to add US stocks, as dividends on these will be taxed.
> 
> https://www.taxtips.ca/personaltax/investing/transfersharestorrsp.htm
> 
> * I’ve just looked. Most of my stocks have gained as I have held them for a long time.


If they have gained, transferring them to TFSA is same as if you sell them in taxable account - You have to pay tax on the capital gain.


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## fireseeker (Jul 24, 2017)

In-kind contributions to TFSAs (or RSPs) are tricky.
Moving a security with a gain triggers a deemed disposition and capital gains tax. Moving a security with a loss prevents you from ever claiming that loss. Neither is desirable, generally.
I have made several in-kind contributions, but only for shares that are near break-even and only for shares I wish to continue holding.
Otherwise, you are better to sell your losers and wait the 31 days, or buy a decent clone (i.e. one Big Bank for another Big Bank). For gainers, it is only worthwhile to accept the cap gain tax hit if you strongly believe the stock will rally in the near term and will benefit from sheltering.
One more point: January is the optimal time for a contribution, but it's not the only time. If you can find $12,000 over the next six months you can make a cash contribution then. Or you can do it whenever one of your stocks moves into a neutral gain/loss position.

Added: Agent 99 beat me to the punch about cap gains.


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## heyjude (May 16, 2009)

agent99 said:


> If they have gained, transferring them to TFSA is same as if you sell them in taxable account - You have to pay tax on the capital gain.


Yes, I’m aware of that. If I leave them where they are, and they continue to gain, I will eventually pay tax on the accumulated capital gains when I sell them. Transferring them to a TFSA sinply stops the process of accumulating taxable capital gains.


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## agent99 (Sep 11, 2013)

heyjude said:


> Yes, I’m aware of that. If I leave them where they are, and they continue to gain, I will eventually pay tax on the accumulated capital gains when I sell them. Transferring them to a TFSA sinply stops the process of accumulating taxable capital gains.


Yes, that is true. But don't you have some holding with losses that you could offset the gains against? 

And the other point - For $6000 you can buy 64 RY shares or 59 of CM or 89 TD. But never a round number. So even if transferred, may leave odd lot in taxable account. I guess I like to work in lots of 100 or maybe 50s for more expensive stocks. In past I think we had to deal in board lots.


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## Eclectic12 (Oct 20, 2010)

If round numbers of shares are important ... I'm not sure why wouldn't transfer whatever favourable number is plus some cash to the TFSA, leaving whatever acceptable number in the taxable account.

As for needing board lots in the past, I believe this is more of an American exchange thing as they used to tack on fees to anything that wasn't a board lot. The Toronto exchange has not worried about it as I had no issues buying/selling three shares in the '90's in a taxable account.

I seem to recall reading that with more computers involved as well as more investors, the US markets have largely dropped the odd lot fees.



Cheers


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## AltaRed (Jun 8, 2009)

On the TSX, I believe board lots transact immediately via computers whereas odd lots are aggregated/bundled into board lots for transactions. To the retail investor, I believe the process is invisible (I've only ever traded once or twice in odd lots). This might be helpful http://tmx.complinet.com/en/display...bid=2072&element_id=317&record_id=317&print=1

Also, https://www.investopedia.com/terms/b/boardlot.asp although I believe this would be US centric


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## Retiredguy (Jul 24, 2013)

Digressing. What's everyone thinking of buying in their TFSA (s) with their 6K and any accumulated cash. I'm thinking TD this week.


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## kcowan (Jul 1, 2010)

Notice on TDDI website today:

TD notice January 1
"If you'd like to contribute securities such as stocks, mutual funds or exchange traded funds to your TFSA, RSP or RESP instead of cash, simply click on the Transfers button and select Securities Transfers."
No mention of the capital loss issue.


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## Eclectic12 (Oct 20, 2010)

AltaRed said:


> On the TSX, I believe board lots transact immediately via computers whereas odd lots are aggregated/bundled into board lots for transactions. To the retail investor, I believe the process is invisible (I've only ever traded once or twice in odd lots) ...


Makes me wonder how the board lot submission works ... my last one for 700 shares was filled as 100, 300 and 100 on the confirmation that included the commission to buy with a separate confirmation confirmation with no buy commission for 100 and 100.

The 135 order was filled on one confirmation, with the buy commission.


Both were reported as filled in about thirty seconds or so.



When googling for odd lots in the US, there is a technical analysis that assumes odd lot orders are wrong as they are small, misinformed, less resourced investors. Board lots are considered to be institutional investors with better resources so they their prices are "right". Prior to 2014, in the US only board lot orders were reported on the tape despite US exchanges allowing all order sizes. In 2014, odd lots were added to the tape, increasing transparency.
https://www.bloomberg.com/professional/blog/introducingthe-top-odd-lot-stocks-awards/


Cheers 

Cheers


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## agent99 (Sep 11, 2013)

Retiredguy said:


> Digressing. What's everyone thinking of buying in their TFSA (s) with their 6K and any accumulated cash. I'm thinking TD this week.


I will move cash to our TFSA tomorrow, then buy BMO HISA AAT770. Then wait and see what markets look like in later January. Too much volatility for me at present.


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## AltaRed (Jun 8, 2009)

Eclectic12 said:


> Makes me wonder how the board lot submission works ... my last one for 700 shares was filled as 100, 300 and 100 on the confirmation that included the commission to buy with a separate confirmation confirmation with no buy commission for 100 and 100.
> 
> The 135 order was filled on one confirmation, with the buy commission.
> 
> ...


Different brokerages assign the buy commissions in different ways. Scotia iTrade assigns it to the first partial buy only, while BMO IL distributes it among the partial fills. I find the latter a bit irritating. As regards board lots, when I have used a market order, I rarely have seen partial fills and if I do, they are literally exact same time or 1 second apart. It depends on what size lots are on the other side. Limit orders are different. It depends on what matches your Bid on the other side. Could take seconds, or minutes, or hours, or never. 

It's been ages since I've put in an order with an odd lot, i.e. whether <100 shares, or a number like 235 shares but the last time my ex did that in her TFSA, I saw that the 200 got filled in one partial and the 35 got filled in another partial. Purely random I suppose.


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## OptsyEagle (Nov 29, 2009)

kcowan said:


> Notice on TDDI website today:
> 
> TD notice January 1
> "If you'd like to contribute securities such as stocks, mutual funds or exchange traded funds to your TFSA, RSP or RESP instead of cash, simply click on the Transfers button and select Securities Transfers."
> No mention of the capital loss issue.


What is interesting is TDDI put up that message on the 26th of December or something like that. Huge mistake. I imagine a few clients probably called them to enquire and they noticed their error and quickly removed it until today. Hopefully no one made their contributions too early.

I was planning on buying some more beaten down Utility stocks with this years TFSA contribution room. I then thought, why not take advantage of some tax loss sellers and buy them early in the margin account, where the money was going to come from anyway, and then transfer them in-kind, in the new year. With that strategy, capital losses in them would be lost, but I was not going to benefit from them in the TFSA anyway, and if I make a small capital gain, it was money I was not going to make if I waited until January 2nd to buy them anyway.

So far it has worked out that I am about hundred bucks ahead, but here was the problem I luckily noticed on Monday, Dec. 31, 2018. Since the $6,000 of stock I bought went up, I could not contribute all of it, in-kind anymore because it was now worth $6,115. Sooooo, I had a dividend in my TFSA just sitting in cash for about $194, so I quickly withdrew it to my margin account, on Dec. 31st, creating another $194 of TFSA contribution room for 2019. So I could now move all that stock to the TFSA today and I did. TDDI not only confirms the transaction is successful but also confirms the contribution amounts as well. Very nice.


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## My Own Advisor (Sep 24, 2012)

I did this myself in recent years:
https://www.myownadvisor.ca/should-i-transfer-stocks-into-my-tfsa/


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## My Own Advisor (Sep 24, 2012)

Retiredguy said:


> Digressing. What's everyone thinking of buying in their TFSA (s) with their 6K and any accumulated cash. I'm thinking TD this week.


RY, TD, BNS and AQN are on my list this week for buys.


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