TFSA 2016

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izzy
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Re: TFSA 2016

Post by izzy »

I believe the executor can make a final RRSP contribution from the estate so I would guess (and it is only a guess) he/she can make a final TFSA contribution too if there are sufficient funds!
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Peculiar_Investor
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Re: TFSA 2016

Post by Peculiar_Investor »

I found CRA's Death of a TFSA holder and looked it over but there doesn't seem to anything directly to answer the question about the unused contribution room that may have existed for the original TFSA holder. The linked Successor holder article indicates
CRA wrote:Except in cases where an excess TFSA amount existed in the deceased holder's TFSA at the time of their death, the successor holder's unused TFSA contribution room is unaffected by their having assumed ownership of the deceased holder's account.
Again, no mention of the unused contribution room that may have existed for the original TFSA holder.
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adrian2
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Re: TFSA 2016

Post by adrian2 »

optionable68 wrote:Mrs. Senior Spouse has maximized her TFSAs since inception. Now, lets say Mr. Senior Spouse has been lazy and has deposited just $10,000 into a TFSA since inception with no withdrawals, and then dies having previously willed and named Mrs. Senior Spouse as successor holder. Given the total allowable deposits as of today should have been $46,500, does the Ms. Senior Spouse get not only the $10,000 (plus earned int) but also the remaining $36,500 in contribution room?
From the horse's mouth:
Except in cases where an excess TFSA amount existed in the deceased holder's TFSA at the time of their death, the successor holder's unused TFSA contribution room is unaffected by their having assumed ownership of the deceased holder's account.
It looks like the remaining contribution room goes into the graveyard.
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optionable68
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Re: TFSA 2016

Post by optionable68 »

adrian2 wrote:
Except in cases where an excess TFSA amount existed in the deceased holder's TFSA at the time of their death, the successor holder's unused TFSA contribution room is unaffected by their having assumed ownership of the deceased holder's account.
It looks like the remaining contribution room goes into the graveyard.
Thanks adrian, however "unaffected" might refer to the remaining deceased spouses TFSA room being unaffected. That is, the deceased spouses remaining contribution room may not be impacted (ie grave-yarded). I guess the wording is what has me confused :?
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AltaRed
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Re: TFSA 2016

Post by AltaRed »

I read that differently. I read it as the surviving spouse's unused contribution room being unaffected.

Example: Spouse A has $10k of unused contribution room, Spouse B had the nerve to die but had a successor holder beneficiary to spouse. Spouse A gets Spouse B's TFSA without affecting Spouse A's unused contribution room of $10k.

No idea from any of that what happens to Spouse B's unused contribution room BUT if I follow conventional logic that Spouse B no longer exists as a person as of date of death, that should wipe out unused contribution room (noting CRA might have an exception for RRSPs per Izzy's speculation - to be verified).

Added: http://www.taxplanningguide.ca/tax-plan ... eath-rrsp/ and http://www.allaboutestates.ca/2010/12/r ... h/Mentions contribution to spousal RRSP only.

Added again: from http://www.ey.com/CA/en/Services/Tax/Ta ... FSA-holder see my underlined statement
Income tax considerations
From an income tax perspective, there has been no change: any income earned after the death of the holder will continue to accrue on a tax-free basis in the TFSA and the deceased’s spouse or common-law partner may make withdrawals from the TFSA free from tax.

As the successor holder has taken over the TFSA, the normal rules regarding contribution room and the combining or consolidating of TFSA accounts will apply. Where the successor holder had their own TFSA, they may choose to consolidate the two plans by the direct transfer of all or part of the assets of the holder’s plan to their own plan. In most cases, the direct transfer will not affect the successor holder’s TFSA contribution room.

Going forward, the successor holder may make additional contributions to the combined TFSA (or separate TFSAs) based only on their own unused contribution room,

Excess TFSA amount
Usually, the survivor’s contribution room is unaffected by the acquisition of the deceased’s TFSA. However, if the deceased had an excess TFSA amount at the time of death, the excess TFSA amount may pass to the survivor. The survivor will be deemed to contribute the entire excess TFSA amount to a TFSA the survivor held at the beginning of the month after the date of death
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optionable68
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Re: TFSA 2016

Post by optionable68 »

Thanks AltaRed, I think E&Ys description clears it up and also aligns with adrian2's interpretation.

cheers :thumbsup:
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Re: TFSA 2016

Post by Quebec »

Peculiar_Investor wrote:in my experience this isn't strictly enforced.
Don't try to contribute directly to your spouse's TFSA at Questrade. They won't accept the money. The only way is to write the other person a cheque (or electronic equivalent), and then the money moves from chequing account to TFSA, with the two accounts having the same name.
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Re: TFSA 2016

Post by BRIAN5000 »

Almost time to make your 2017 TFSA contribution. Will transfer money from my account to wife's account then to her TFSA, yawn!
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Re: TFSA 2016

Post by fundamental »

Ever wonder what happens to unused TFSA contribution room upon your spouses death?

Advisor.ca suggests the unused room dies with the holder
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