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Non-Qualified Investment in my TFSA Account [Questrade Issue?]

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  • Nov 27th, 2015 10:49 am
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Deal Addict
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Jun 30, 2005
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Toronto

Non-Qualified Investment in my TFSA Account [Questrade Issue?]

The CRA sent me a letter saying that Questrade told them I held a non-qualified investment in my TFSA in 2014. I have no idea what they are talking about, I've also always held the same kind of assets since 4 or 5 years ago. Essentially they are just index ETFs and also sometimes options on those Index ETFs. I've made less than $5,000 contribution to my TFSA in 2014 as well.

The CRA says I have to file a TFSA tax return, RC243 I believe. But I have no idea what non-qualified investments they are talking about.

I can't find any information about what I am supposed to do (I don't even know what I did wrong!) and this 30-day count down is really stressing me out.

What should I do?
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May 11, 2014
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IBOPM wrote: The CRA sent me a letter saying that Questrade told them I held a non-qualified investment in my TFSA in 2014. I have no idea what they are talking about, I've also always held the same kind of assets since 4 or 5 years ago. Essentially they are just index ETFs and also sometimes options on those Index ETFs. I've made less than $5,000 contribution to my TFSA in 2014 as well.

The CRA says I have to file a TFSA tax return, RC243 I believe. But I have no idea what non-qualified investments they are talking about.

I can't find any information about what I am supposed to do (I don't even know what I did wrong!) and this 30-day count down is really stressing me out.

What should I do?
I would double-check all your investments. Based on what you say, they should be fine. Did you invest in any shares on OTC, PinkSheets, foreign shares of any kind? Did any of the shares you purchase become delisted? If all your shares are normal stock, ETFs, financial instruments, you should be OK.

I would first call Questrade, and find out what exactly they reported to the CRA in terms of non-qualified investment. If they have no clue, I would contact the CRA and ask them for more information. It could just be an error.
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Jun 30, 2005
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Nope, just IWM and SPY. US-listed ones don't count as non-qualified, right? Unless that was changed last year?

Thanks for your advice, I will call them.
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IBOPM wrote: Nope, just IWM and SPY. US-listed ones don't count as non-qualified, right? Unless that was changed last year?

Thanks for your advice, I will call them.
Both are traded on NYSEArca so should be OK. The one thing I could think of was US witholding tax taken out of your account? TFSA does not qualify for tax exempt status with US securities so should still be a 15% witholding tax on your dividends or distributions. See if that might possibly have triggered this. Questrade may have not deducted tax on these securities, but that still shouldn't trigger an CRA claim...

http://www.fin.gc.ca/act/fim-imf/dse-bvd-eng.asp
http://business.financialpost.com/perso ... =0c06-f167
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Thanks everyone for the help. I live-chatted with Questrade and got it resolved.

> "We investigated your TFSA, and the result is that we reported this security in error. I would like to apologize for the inconvenience caused by this, but we will be filing an amendment with the CRA to have this corrected, and no further action is required from you."
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I really hoped I didn't have to come back here, but it happened again.

So I got another letter in August from the CRA saying that I still need to pay. I called the CRA and they told me to call Questrade to sort it out. I called Questrade and they acknowledged their fault. They said that they will be sending out the amendment soon and there's nothing I need to do.

Okay, now it's October 28 and I just got another letter from the CRA saying I still need to pay.

WTF Questrade?!
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Mar 22, 2010
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IBOPM wrote: I really hoped I didn't have to come back here, but it happened again.

So I got another letter in August from the CRA saying that I still need to pay. I called the CRA and they told me to call Questrade to sort it out. I called Questrade and they acknowledged their fault. They said that they will be sending out the amendment soon and there's nothing I need to do.

Okay, now it's October 28 and I just got another letter from the CRA saying I still need to pay.

WTF Questrade?!
LOL This can be a horrible experience from the client side. Why don't you just speak with the manager and have him/her send you the confirmation of the amendment they sent to CRA. In a case like this, you kinda need to be aggressive and push them to get things done. Hope it gets resolved quickly.
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Okay, so I called Questrade and the CRA.

First Questrade: I asked them if the amendment was sent out and when. They told me it was sent out in late August (and they couldn't even give me a specific date).

Then I called the CRA: I had a really nice man named Gwon who tried to sort it out for me. They said that they can see a record of "new information" in August but that may not have gotten into the system yet. I asked them what I could do, and he said "At the moment, there is nothing you can do. Wait for the next letter."

:(
Jr. Member
Dec 7, 2014
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Windsor, ON
Are you allowed to trade options in a TFSA?
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Jun 27, 2007
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IBOPM wrote: Okay, so I called Questrade and the CRA.

First Questrade: I asked them if the amendment was sent out and when. They told me it was sent out in late August (and they couldn't even give me a specific date).

Then I called the CRA: I had a really nice man named Gwon who tried to sort it out for me. They said that they can see a record of "new information" in August but that may not have gotten into the system yet. I asked them what I could do, and he said "At the moment, there is nothing you can do. Wait for the next letter."

:(

Hey IBOPM,

I just wanted to mention that we can provide you with a written acknowledgment that an amendment has been sent to CRA, for your own records. We would like to help in any way we can.

Do you want to send me a private message to discuss the details. As you know, I can’t talk about your personal account-related query in a public forum. Your other option is to contact our client services team using live chat or by phone at 1.888.783.7866 to get that letter.
Newbie
Nov 25, 2015
4 posts
Westmount, QC
Wanted to share my experience with Questrade. Same as IBOPM I received a letter from CRA in June stating that my financial institution, Questrade, had reported NQIs in my TFSA and I would need to fill out a form / pay taxes. Called CRA who told me to deal directly with Questrade. Called Questrade and they admitted there was an error on their end and would be 'filing an amendment shortly' with CRA. I asked when they would get in touch with CRA and if I needed to follow up etc. They couldn't give me an exact date but sent me an email to the effect that it was their error and they would be dealing with it. Fast forward to September and I receive a Notice of Assessment from CRA and a bill for taxes owed on a NQI in my TFSA. Call Questrade. Every time I call, the client service agent has no idea about this problem (how is that possible since Questrade told me straight up that they had made this error on many of their clients TFSAs - not something to be proud of). I don't expect customer service to be stellar since Questrade's fees are so low but I start to get the feeling that something is off here. Finally get a specific agent to give me a hand with the problem. It takes many phone calls (I leave messages which aren't returned) and 'business days' of waiting before I realize that Questrade has not rectified the problem and has not 'filed an amendment shortly' with CRA. They've not done anything. The agent told me that since they had made so many errors with their clients TFSAs it was taking a long time. They couldn't tell me how many cases they were dealing with but I pointed out that they've had since June to rectify the problem. I ask when they plan on rectifying the problem. It takes over a week and I receive an email stating that Questrade will rectify the problem with CRA in the new year. More unreturned phone calls since I don't think 2016 is a reasonable time-frame to solve this problem for the 2014 tax year. I want to max out my TFSA and want to get on with my account. I get frustrated. I ask which investment it is. The agent cannot tell me and has to check. Takes over 2 weeks to get back to me with the information. Questrade tells me they can give me a letter stating that the error is theirs and I can send it along to CRA. On CRA's recommendation, I prepare a package with correspondence from Questrade asking CRA to investigate. After sending the package to CRA, Questrade sends me an email stating that in fact they had NOT made an error and the investment in question is truly a non-qualified investment. I ask why it is non-qualified, my agent doesn't know. It takes 2 weeks to get the information why the investment is non-qualified. Call CRA since I've incurred penalties and fees at this point for not paying. CRA tells me to fill out an RC243 for a refund on the taxes since I had gotten rid of that investment in 2014. Write a cheque to CRA, fill out a RC243 and prepare the other paperwork required for a refund for taxes on an NQI in a TFSA. Send to RCA. An agent from RCA calls me on November 26th to let me know that Questrade had flip flopped again and amended with them that the investment was in fact, QUALIFIED. Questrade did this on November 18th. Questrade never called or emailed to let me know this. I'm moving to BMO Investorline.
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Jun 27, 2007
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Hi lilmisspoutiner,

I am sorry about your situation. I’ve responded to the thread you have created. Please send me your account email address so that I can look into this for you.

John from Team Questrade

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