Exploring the Tax Implications of Stock Transference to Tax-Free Savings Accounts (TFSA)
Relocating stocks from unregistered accounts to Tax-Free Savings Accounts (TFSA) can be a tactical move to capitalize on unutilized contribution space, but it’s not devoid of tax consequences. According to the Canada Revenue Agency (CRA), such relocations are equivalent to stock sales, prompting tax on half of any unrealized capital gains. However, transferring stocks with unrealized losses is generally ill-advised as the incurred loss isn’t tax-deductible.
Understanding Tax Implications and Strategies for Handling Unrealized Losses
For cases with unrealized losses, a recommended strategy entails selling the stocks, reporting the loss, and then transferring the cash to the TFSA. Implementing this strategy requires waiting 30 days to repurchase the securities in question in order to avoid tripping the superficial loss rule. Intriguingly, capital losses can be balanced against capital gains within the running year or can even be carried back for three years or extended indefinitely into the future.
Utilizing the S&P/TSX Capped Composite Total Return Index for Tracking Investment Performance
When it comes to tracking and assessing investment performance, the S&P/TSX Capped Composite Total Return Index proves to be a proficient tool accessible via Investing.com. What sets this index apart from standard ones is its dividend reinvestment inclusion. In the year 2023, the total return accounted for approximately 11.8%. For the evaluation of individual stock returns, investors may use resources like CanadaStockChannel.com for Canadian stocks, and dqydj.com for US stocks. These resources emphasize on the fact that earnings for these stocks come from varied sources reported by Reader Wall.
A Deep Look Into the High Dividend Yield Offered By BMO Covered Call Canadian Banks ETF
The BMO Covered Call Canadian Banks ETF stands out with its striking dividend yield of 7.5%, notably surpassing the average yield of the Big Six banks. The said high yield is a result of a covered call strategy wherein call options on the underlying bank stocks are sold to create an additional income stream. Nonetheless, it’s worth noting that this kind of strategy may result in underperformance during surges in market trends due to the possibility of more stocks being called away.
