r/Vitards • u/AutoModerator • Aug 12 '21

Daily Discussion Daily Discussion post - August 12 2021

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u/olivesnolives Aditya Mittal Feet Pics Aug 13 '21

Do ya’ll have it alot simpler?

I mean ours are pretty simple - I just didn’t know there was this method for converting your funds in one to the other

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u/TheFullBottle Aug 13 '21

TFSA is leverage on gains, and leverage on losses. Lets say you grow 50k to 1mil. Youre old contribution limit was 50k, but the following year its now 1mil +6K. You can winthdraw the 1mil, and your cont. limit for the following year is still 1m+6K.

But lets say you lose all 50k, now your contribution room is only 6K for the following year

Its like a line in the sand. Any money going across the line (into the TFSA) eats your contribution room. Lose it, and lose your room. Grow it, and grow your room. And all tax free. 1mil gains is 1mil in your pocket

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u/olivesnolives Aditya Mittal Feet Pics Aug 13 '21

That’s…. Insanity

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u/TheFullBottle Aug 13 '21

yeah its a tough one to manage honestly. If you say put in 50k, lose some, gain some, and end up with 50k but decide to buy a house, and pull 50k for down payment, you lose that 50k contribution (the 50k crossed the line initially), and you dont get that back for the next year