Investing

Noob question: Can i constantly buy and sell stocks under my TFSA?

  • Last Updated:
  • Feb 11th, 2019 4:40 pm
[OP]
Newbie
Mar 17, 2014
58 posts
43 upvotes
Toronto

Noob question: Can i constantly buy and sell stocks under my TFSA?

I am new to investing and i want to know if i buy stocks and sell it the next week and do it constantly, will i get in trouble?
Im not short selling, just small gains of $1 a share.

Thank you for the advice.
9 replies
Penalty Box
Apr 19, 2017
828 posts
637 upvotes
1. Only invest what you can afford to lose
2. Self admitted noobs should NEVER buy and sell. They should buy and HOLD

TFSA- Hold Canadian stocks
RRSP- Hold American stocks
Non-registered- Other stuff
CucuCovers, GreatCanadianRebates, LendingLoop, Mintos, PayMi, Stack, Tangerine, TransferWise, Uber, Wealthsimple
Member
May 5, 2016
334 posts
320 upvotes
Its not advisable because if you do end up making money the CRA is much more likely to go after you but what's worse is you will almost certainly end up losing money by day trading. There's really no upside. Its not just because you're a "noob", the dirty secret very few people want to admit is you can't make money as a trader, its hard to believe and accept because its such a big part of our culture .

OTH, if you're willing to see it as gambling money that you're okay with losing then you're good.
Sr. Member
User avatar
Oct 14, 2015
690 posts
303 upvotes
... the average Canadian need not worry about their TFSA. Very few have near the maximum or attained a value of more than $100,000,” says Jamie Golombek, managing director of tax and estate planning at CIBC.
https://www.moneysense.ca/save/investin ... nts-court/
Some of the factors considered in deciding whether a taxpayer is carrying on a business include frequency of transactions, period of ownership, knowledge of the market, time spent, and financing.
Sr. Member
User avatar
Dec 24, 2007
933 posts
860 upvotes
BC
ayellowbanana wrote:
Feb 11th, 2019 10:08 am
I am new to investing and i want to know if i buy stocks and sell it the next week and do it constantly, will i get in trouble?
The CRA really doesn't care what you do with your TFSA as an average investor, unless it believes there is some tax avoidance scheme you're involved in to create fictictious gains. They target those accounts, which have huge returns compared to the investment limits (total as of 2018 - $57,500). If your accounts are showing $100,000 or more they are likely to be suspicious.

Besides, they know as a fact that the average investor that buys and sells frequency will end up being a loser in the long run.
Member
May 5, 2016
334 posts
320 upvotes
Sorkid49 wrote:
Feb 11th, 2019 2:33 pm
When you sell, your room is gone until next calendar year. This might or might not affect you depending on how much you want to 'flip'.

For the record, if you have NEVER invested anything in TFSA, the total limit is $63,500 now
This is wrong, the contribution room will only be deducted in the case of withdrawals from a TFSA account, selling shares has nothing to do with it.
Jr. Member
Oct 24, 2011
144 posts
104 upvotes
Markham
azorahai wrote:
Feb 11th, 2019 2:40 pm
This is wrong, the contribution room will only be deducted in the case of withdrawals from a TFSA account, selling shares has nothing to do with it.
Oops , thanks, I kept thinking withdrawal.... keep trading!
Deal Addict
Jan 27, 2016
1359 posts
724 upvotes
Toronto, ON
That article stated the 1/4 mil values of tfsa account could get audited, that might be the trigger value...this sucks because I'm almost at that and now not sure what to do
Deal Addict
Jan 28, 2007
2123 posts
1442 upvotes
SW Ontario
Trade away ... nothing stopping you from making money in your TFSA.
The only ones I know CRA has gone after, are those who are either manipulating the rules or can be proven to be taking unfair advantage of the TFSA account, which is usually professional traders.
I'd rather be outdoors camping, kayaking, and mountain biking ...

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