# Tfsa question



## clovis8 (Dec 7, 2010)

I am a little confused about how the 5k/year rule works. Let's say I deposited 5k into a tfsa then lost it all in penny stocks. Can I put more in? How about if I had two tfsas. Is my total deposit between them 5k?


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## Potato (Apr 3, 2009)

Think of the TFSA like rabbits in your backyard. The government is your parents at the front door. They say you can bring $5k of bunnies into the backyard every year. Beyond that, they're looking out at the front door, so they don't care what happens in the backyard.

You can have your bunnies reproduce like, well, bunnies, you can put them all in one big pen or a bunch of different ones. It doesn't matter, as long as no more than $5k in bunnies goes past your parents per year.

If you take a bunny out to show and tell at school, your parents will remember you took that bunny out and will let you put it back in the next calendar year and not count it against your $5k limit per year - it's not a new bunny. (recontribute withdrawals)

If you don't handle your bunnies well and they all die, your parents don't want to hear about it, you can't bring in any more bunnies.


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## Young&Ambitious (Aug 11, 2010)

Potato I love your bunny example! 

Yes 5k a year regardless of how that amount appreciates or depreciates or how it is spread out across multiple accounts.


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## clovis8 (Dec 7, 2010)

Thanks for info and the laugh. I get it now.


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## kcowan (Jul 1, 2010)

So potato, do you have any bunnies that I can invest in?


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## Racer (Feb 3, 2010)

This was great, Potato! I read out your entire example word-for-word to my husband and we had a good laugh. You've got to hate those dead bunnies!


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## CanadianCapitalist (Mar 31, 2009)

Potato said:


> Think of the TFSA like rabbits in your backyard...


Hilarious!


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## bean438 (Jul 18, 2009)

And even if you take out bunnies one year, and put them back the same year, no worries because you can cry foul, stomp your feet like a little child that you didnt understand the way of the bunny and CRA will waive your penalties.


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## hedgehog12 (Feb 28, 2011)

*using TFSA to buy stocks question...*

Hello all,

I have a very beginner question about using my TFSA to buy stocks.

I've recently put the maximum amount of $5000 into my TFSA account , and I plan to buy some stocks soon.

Assuming the stocks go up and I selling for profit and make $1000.

1) where does that $1000 extra go?? does that I mean I now have $6000 in my TFSA account? 

2) is the entire amount of $6000 tax free, or just the original $5000?


Thanks in advance!


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## CanadianCapitalist (Mar 31, 2009)

Please check this thread for an answer to your question.


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