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Sold some Shares, Cash sitting in an investment account, is it taxable?

  • Last Updated:
  • Apr 5th, 2019 10:52 am
[OP]
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Jun 24, 2015
2299 posts
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Woodbridge, ON

Sold some Shares, Cash sitting in an investment account, is it taxable?

I sold some shares, turned them into cash, they are sitting as cash in one of my investment account. I already received a T5008 for the sale of the shares, which I understand was taxable, but having the cash sitting in there as cash, is that gonna be a problem for me or should i move the cash to a different account of mine so i can use it to pay down some bills or debts?
Hi
7 replies
Deal Fanatic
Feb 15, 2006
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Toronto
Cash itself won't be taxable. The interest you earn from that cash in the (non-registered) investment account, is taxable.
Deal Fanatic
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Jun 19, 2009
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Scarborough
GoodFellaz wrote:
Apr 4th, 2019 11:39 am
I sold some shares, turned them into cash, they are sitting as cash in one of my investment account. I already received a T5008 for the sale of the shares, which I understand was taxable, but having the cash sitting in there as cash, is that gonna be a problem for me or should i move the cash to a different account of mine so i can use it to pay down some bills or debts?
The cash isn't taxable, only the gain is (if applicable). Any interest you earn on the cash while it is sitting there is also taxable.
Sr. Member
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Jul 25, 2018
640 posts
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Milton, ON
I'm no tax expert, but I am assuming that a T5008 means the money was invested in a non-registered account? In which case, you would pay tax on the capital gains, and then tax on any interest you accumulate on the total amount. For example, you purchased 100 shares of X for $10 each (value of $1,000). Let's say X rose to $15 a share, at which point you sold for a gain of $5/share (value of $1,500). You would pay tax on the $500 (capital gains tax). Now, you have $1,500 as cash in your investment account. You do not owe tax for having it sit as cash, unless you are gaining interest (don't think brokers pay interest on cash, that's one of the ways they make money if I'm not mistaken). Let's just say you are gaining interest, 2%. So in a year, you'll gain $30 (2% of $1,500), and you will have to pay tax on the $30.

If you had the money in a TFSA account and went through the above scenario, you would owe no tax on the capital gains nor on the 2% interest.

Hope this helps.
[OP]
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Jun 24, 2015
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Woodbridge, ON
so get this, im trying to transfer in shares from AST to my tfsa trading account, at a 1 for 1, so my shares go in directly with no buy/sell. now they telling me my shares have to go from my own broker to my trading cash account first then move from my cash account to my tfsa trading account, does that make sense? when i filled in the e-form, i put the tfsa account number not the cash account number, will the transfer go thru and will they fix it up in the back end or will they cancel it and i have to do it all over with the appropriate numbers?
Hi
Sr. Member
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Jul 25, 2018
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Milton, ON
GoodFellaz wrote:
Apr 4th, 2019 12:50 pm
so get this, im trying to transfer in shares from AST to my tfsa trading account, at a 1 for 1, so my shares go in directly with no buy/sell. now they telling me my shares have to go from my own broker to my trading cash account first then move from my cash account to my tfsa trading account, does that make sense? when i filled in the e-form, i put the tfsa account number not the cash account number, will the transfer go thru and will they fix it up in the back end or will they cancel it and i have to do it all over with the appropriate numbers?
https://www.google.com/amp/s/www.moneys ... -tfsa/amp/
Newbie
May 24, 2018
86 posts
45 upvotes
Ontario
GoodFellaz wrote:
Apr 4th, 2019 11:39 am
I sold some shares, turned them into cash, they are sitting as cash in one of my investment account. I already received a T5008 for the sale of the shares, which I understand was taxable, but having the cash sitting in there as cash, is that gonna be a problem for me or should i move the cash to a different account of mine so i can use it to pay down some bills or debts?
Just to be clear, 1st post got nothing to do with the 2nd, yes ?
GoodFellaz wrote:
Apr 4th, 2019 12:50 pm
so get this, im trying to transfer in shares from AST to my tfsa trading account, at a 1 for 1, so my shares go in directly with no buy/sell. now they telling me my shares have to go from my own broker to my trading cash account first then move from my cash account to my tfsa trading account, does that make sense? when i filled in the e-form, i put the tfsa account number not the cash account number, will the transfer go thru and will they fix it up in the back end or will they cancel it and i have to do it all over with the appropriate numbers?
Regarding the 2nd post, pls elaborate what AST stands for ?
It appears there is 3 accounts involved - (1) AST, (2) brokerage cash, & (3) TFSA under same broker. Yes ?
May be helpful to disclose the brokerage name as well ?
[OP]
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Jun 24, 2015
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Woodbridge, ON
i did, AST Trust company.
the other two are my self directed investing accounts, don't need to disclose the name cus its pretty obvious its one of the big 5 companies
Hi

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