For most people, the 2014 tax season is over, you made it!  Now, for the upcoming year, keep this in mind if you contribute shares to your RRSP or TFSA this year!

  • If you contribute shares from non-registered account(s) to your registered account(s) and create a loss in the originating account, this is considered a superficial loss and will be disallowed as a capital loss.
  • If you contribute shares from non-registered account(s) to your registered account(s) and create a gain in the originating account, this is taxable to you.
  • If you dispose of shares at a loss and you, your spouse or any affiliates repurchase the shares within 30 calendar days.  This is a superficial loss and will be disallowed.
  • If shares are disposed of at a loss in your TFSA, there is no superficial loss if the shares are repurchased within the TFSA within the 30 days as gains and losses are not taxable or deductible.

What Price is used When you Contribute?

The price used for your contribution is the market price at the time of the transfer.  If you are transferring a bond, the market value will include any accrued interest.

For tax purposes you are essentially disposing of the shares so any gain will be taxable to you!

Consider if it is more beneficial to you to dispose of the shares in the non-registered account(s) and contribute the cash directly to the registered account.

Some information contained here is courtesy of TaxTips.ca.  Click the link to find additional information on Superficial Losses and Other Disallowed Losses or to find more information on Transferring your Shares to Registered Accounts.

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