Income and gains on TFSA overcontributions can remain in account, CRA says

Author: External Author | | Categories: Accountant , Accounting , Bookkeeping , Tax Accountant , Tax Consultant , Tax Planning

Canadians may keep income or gains earned from overcontributions to their TFSAs as long the overcontribution was not deliberate and they pay the 1% monthly penalty tax on the excess contribution, the Canada Revenue Agency (CRA) confirmed in a recent technical interpretation.

Allowing income and gains earned on overcontribution amounts to remain in TFSAs eases plan administration in cases where TFSA holders inadvertently contribute too much to their tax-free account, says Wilmot George, vice-president of tax, retirement and estate planning with Toronto-based CI Investments Inc.

Original Article Source Credits:   Advisor's Edge , https://www.advisor.ca/

Article Written By:  Rudy Mezzetta

Original Article Posted on:  November 2, 2020

Link to Original Article:  https://www.advisor.ca/tax/tax-news/income-and-gains-on-tfsa-overcontributions-can-remain-in-account-cra-says/

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