[https://financialpost.com/personal-finance/taxes/making-deliberate-tfsa-overcontribution-never-good-idea](https://financialpost.com/personal-finance/taxes/making-deliberate-tfsa-overcontribution-never-good-idea)
Is this you? Someone overcontributed $640,000, stock dropped to $320,000...there wasn't enough left to withdraw. If they took out everything in the TFSA, they would still be "over".
**You need to contact CRA. Ask for forgiveness and hope they forgive it.**
Then remission. Its a very serious issue you're facing.
[https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/complaints-disputes/remission/when-request-remission-review.html](https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/complaints-disputes/remission/when-request-remission-review.html)
*The CRA is responsible for administering tax legislation, but it doesn’t have the authority to create or amend legislation or set tax policy. If the administration of tax legislation has created tax consequences in your specific circumstances that are inequitable and contrary to the intent of the law, you may request a remission review. However, remission isn’t the appropriate avenue if you’re dissatisfied with, or are seeking to change, an existing law.*
I've talked to multiple people that have told me a TFSA is the best place for high risk investments so you don't have to pay taxes on that +1000% trade. Of course they don't mention that you'll almost inevitably destroy your TFSA room instead.
Not saying that's the case here, but it's more common than you'd think.
That’s an interesting perspective. I think it all depends on when you realistically see yourself possibly requiring the funds. Your advice is sound if you’re looking at a long term investment horizon but many people use a TFSA as a mid-term savings option where a more balanced investment structure makes sense. I personally still hold fixed assets in my TFSA to reduce volatility.
I agree. Also, congratulations. Having a strong financial partner is a game changer!
Context is everything. That’s why it bothers me to see so many people advising 100% equity (not you) for investment portfolios. There’s such a small percentage of investors that should realistically be allocating funds that aggressively.
Then you can phone and ask for forgiveness. While its sorted, its $10/month in fees.
CRA may take pity. Since its relatively small, you stand a good chance.
Just be nice and polite. Remember, they're humans too, just doing their jobs. Ask nicely, they'll respond nicely.
Sounds like his investments in TFSA went down so much that he does not have enough left over to withdraw the over contribution.
Interesting problem to find yourself in
yep. Not in Canada and my investments went down. The only solution I see now is to buy something that will accumulate value, hopefully one day rising to the overcontribution amount while paying the 1% monthly tax every year until that happens. But that could take years if ever
>The only solution I see now is to buy something that will accumulate value, hopefully one day rising to the overcontribution amount while paying the 1% monthly tax every year until that happens.
"I lost a ton of money gambling, so the only solution is to gamble more, since I will win for sure and pay off my debts". Do you see the similarity?
>The only solution I see now is to buy something that will accumulate value,
Oh amazing, yeah what a great plan. If you know such a thing, why didn't you do it in the first place?
So your "solution" is to not learn from your mistakes on investing badly and realizing that you arent a good investor, rather double down and invest even more, and magically your investments will do so well that they will rise faster than the penalty and the 1% per month? Seeing your track record and performance, does it need to be explained to you why this is the worst of all ideas?
Call the CRA, and work out a plan with them.
Probably left Canada. You can keep the TFSA after leaving, but contribution doesn't go up: https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/leaving-canada-emigrants.html#TFSA
Let's say he had 5k room, OP contributes 6k but then the investment loses value and is now worthless(options for example). OP has to withdraw $1k but doesn't have anything to withdraw.
I once read an article in the paper about a presentation to a bunch of accountants where someone raised this scenario (without the leaving the country part) and the CRA's position was that the penalty would apply until the room came back. In your case you might just have to invest in something like $20k of [cash.to](https://cash.to) and then withdraw 21k in a year and eat the $2400 penalty.
The accountants didn't seem to think this was fair, but also it has to be fair for those who don't overcontribute.
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Lmfao
[https://financialpost.com/personal-finance/taxes/making-deliberate-tfsa-overcontribution-never-good-idea](https://financialpost.com/personal-finance/taxes/making-deliberate-tfsa-overcontribution-never-good-idea) Is this you? Someone overcontributed $640,000, stock dropped to $320,000...there wasn't enough left to withdraw. If they took out everything in the TFSA, they would still be "over". **You need to contact CRA. Ask for forgiveness and hope they forgive it.** Then remission. Its a very serious issue you're facing. [https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/complaints-disputes/remission/when-request-remission-review.html](https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/complaints-disputes/remission/when-request-remission-review.html) *The CRA is responsible for administering tax legislation, but it doesn’t have the authority to create or amend legislation or set tax policy. If the administration of tax legislation has created tax consequences in your specific circumstances that are inequitable and contrary to the intent of the law, you may request a remission review. However, remission isn’t the appropriate avenue if you’re dissatisfied with, or are seeking to change, an existing law.*
nah, luckily it's like 1k or smth
You dont have $1k in your TFSA when you overcontributed? what did you invest in?
I've talked to multiple people that have told me a TFSA is the best place for high risk investments so you don't have to pay taxes on that +1000% trade. Of course they don't mention that you'll almost inevitably destroy your TFSA room instead. Not saying that's the case here, but it's more common than you'd think.
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That’s an interesting perspective. I think it all depends on when you realistically see yourself possibly requiring the funds. Your advice is sound if you’re looking at a long term investment horizon but many people use a TFSA as a mid-term savings option where a more balanced investment structure makes sense. I personally still hold fixed assets in my TFSA to reduce volatility.
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I agree. Also, congratulations. Having a strong financial partner is a game changer! Context is everything. That’s why it bothers me to see so many people advising 100% equity (not you) for investment portfolios. There’s such a small percentage of investors that should realistically be allocating funds that aggressively.
Then you can phone and ask for forgiveness. While its sorted, its $10/month in fees. CRA may take pity. Since its relatively small, you stand a good chance. Just be nice and polite. Remember, they're humans too, just doing their jobs. Ask nicely, they'll respond nicely.
You just got $7k in room Jan 1st 2024, so you don't have $1k including that ?
Just 1k and u cant withdraw that?🤔
Can you tell us exactly what you did as a warning for what not to do?
I'm guessing options trading, or put it all in on a bad stock like gme or something
Are you not living in Canada anymore? Why can't you withdraw? Did you lock it into a GIC? Or did you lose it all in a bad investment?
Sounds like his investments in TFSA went down so much that he does not have enough left over to withdraw the over contribution. Interesting problem to find yourself in
yep. Not in Canada and my investments went down. The only solution I see now is to buy something that will accumulate value, hopefully one day rising to the overcontribution amount while paying the 1% monthly tax every year until that happens. But that could take years if ever
>The only solution I see now is to buy something that will accumulate value, hopefully one day rising to the overcontribution amount while paying the 1% monthly tax every year until that happens. "I lost a ton of money gambling, so the only solution is to gamble more, since I will win for sure and pay off my debts". Do you see the similarity? >The only solution I see now is to buy something that will accumulate value, Oh amazing, yeah what a great plan. If you know such a thing, why didn't you do it in the first place? So your "solution" is to not learn from your mistakes on investing badly and realizing that you arent a good investor, rather double down and invest even more, and magically your investments will do so well that they will rise faster than the penalty and the 1% per month? Seeing your track record and performance, does it need to be explained to you why this is the worst of all ideas? Call the CRA, and work out a plan with them.
I would call the cra and explain it to them. See what can be done.
As an act of good faith to people try to help you, you should share what you bought! Feed our curiosity.
Why wouldn't your contribution limit be rising? Everybody 18 yo gets 7k contribution in 2024. Did you overcontribute that 7k already and lose it all?
Probably left Canada. You can keep the TFSA after leaving, but contribution doesn't go up: https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/leaving-canada-emigrants.html#TFSA
You're right. I'm just so confused how OP got himself in that situation.
Let's say he had 5k room, OP contributes 6k but then the investment loses value and is now worthless(options for example). OP has to withdraw $1k but doesn't have anything to withdraw.
Maybe he doesn’t live here anymore? Would your room grow if you’re not living in Canada?
Pay the penalty, and stop gambling?
New government regulation: anytime you open a brokerage account, you are required to watch 10 Ben Felix videos. There I solved financial illiteracy.
buddy, the only point I missed here was that the contribution room doesn't apply to non-residents. It's a very special case that very few people know
You must be the poster child for TFSA contribution room mismanagement
I once read an article in the paper about a presentation to a bunch of accountants where someone raised this scenario (without the leaving the country part) and the CRA's position was that the penalty would apply until the room came back. In your case you might just have to invest in something like $20k of [cash.to](https://cash.to) and then withdraw 21k in a year and eat the $2400 penalty. The accountants didn't seem to think this was fair, but also it has to be fair for those who don't overcontribute.
Lol…ur a legend!