Personal Finance

Income question for financial hardship while unlocking LIRA

  • Last Updated:
  • Nov 12th, 2017 1:43 am
[OP]
Newbie
Dec 22, 2015
15 posts
4 upvotes

Income question for financial hardship while unlocking LIRA

I'm not working, and the only income I've had this year is from selling stocks and interest. I'm wanting to unlock some of my LIRA under the financial hardship clause, but am wondering what counts as income. Is it the capital gains portion of selling stocks, or the entire profit value?

For example, I sell stocks for a gain of $50,000. Capital gains would only be half that. So what is my income? 50k or 25k?
5 replies
Deal Fanatic
User avatar
Feb 19, 2010
6237 posts
2973 upvotes
User076820 wrote: I'm not working, and the only income I've had this year is from selling stocks and interest. I'm wanting to unlock some of my LIRA under the financial hardship clause, but am wondering what counts as income. Is it the capital gains portion of selling stocks, or the entire profit value?

For example, I sell stocks for a gain of $50,000. Capital gains would only be half that. So what is my income? 50k or 25k?
Anything coming out of a LIRA (same as an RSP) is straight income. There is no consideration for what has happened within the LIRA as far as interest, dividends, capital gains or losses.
Last edited by Conquistador on Nov 11th, 2017 10:35 pm, edited 1 time in total.
[OP]
Newbie
Dec 22, 2015
15 posts
4 upvotes
Sorry, I should clarify, the stocks sold would be coming from an unregistered account.
Sr. Member
Apr 18, 2017
930 posts
770 upvotes
Toronto
User076820 wrote: Sorry, I should clarify, the stocks sold would be coming from an unregistered account.
The financial hardship unlocking based on low income... your income has to be 2/3 of 2017 YMPE or less, and this is before taxes. It says it on Form FHU4, im assuming this is a Ontario LIRA?

So in your case if you sell 50k worth of stocks, you wouldn't be able to withdraw from the LIRA based o low income.
Deal Addict
Mar 1, 2016
1092 posts
399 upvotes
toronto
For example, I sell stocks for a gain of $50,000. Capital gains would only be half that. So what is my income? 50k or 25k?
This is incorrect, if you sell stock for a gain of $50,000, your capital gains are $50,000.


it is based on expected income, so if you expect to sell stocks for $50,000 in capital gains this is what you are expecting (FSCO does not care about tax treatment) you would not be able to withdraw any money for financial hardship. Why do you sell so much stocks every year?
Deal Addict
Mar 1, 2016
1092 posts
399 upvotes
toronto
hockeyfan1990 wrote: The financial hardship unlocking based on low income... your income has to be 2/3 of 2017 YMPE or less, and this is before taxes. It says it on Form FHU4, im assuming this is a Ontario LIRA?

So in your case if you sell 50k worth of stocks, you wouldn't be able to withdraw from the LIRA based o low income.
low expected income. you can time your withdrawal, to optimise your expectations. of course if you have $50,000 capital gains every year it's hard to justify other amounts, but if you did one year, it's justifiable that it's not recurring, and process a withdrawal in next tax year.

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