Investing

Sold funds in non-registered account

  • Last Updated:
  • Oct 30th, 2019 9:30 pm
[OP]
Newbie
Jun 3, 2019
52 posts
15 upvotes

Sold funds in non-registered account

I had around $60k in my non-reg account. I couldn't deal with how high and low it would go so I sold everything and now its in cash.

Question: Will I have to pay taxes on the capital gains? If so, how do I find out how much the capital gains was and how much ill have to pay?

(I'm with TDWaterhouse)
14 replies
Member
User avatar
Oct 6, 2005
236 posts
96 upvotes
Montreal
Click on the gain and lost tab under the specific account.
[OP]
Newbie
Jun 3, 2019
52 posts
15 upvotes
CKY350 wrote: Click on the gain and lost tab under the specific account.
Thank you!

Sold funds in Jan 2019. Gains were $1815. So will I be taxed on 50% of this amount? i.e 907?
[OP]
Newbie
Jun 3, 2019
52 posts
15 upvotes
Next question: Can I use the $60k cash to move it to my TFSA, RRSP without any penalty?
Deal Addict
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Oct 14, 2001
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GMA
AnnCook wrote: Next question: Can I use the $60k cash to move it to my TFSA, RRSP without any penalty?
Yes if you have contribution room. Depending on your situation and/or goal, one might be better suited than the other.
Member
Jan 22, 2006
400 posts
23 upvotes
Toronto
Question: Does transferring from an open to another open account in cash proc capital gains? For example, I currently have an investment account at Tangerine and would like to transfer it to Quest Trade - since Tangerine would have to sell the shares first before transferring in cash to Quest Trade, would there be capital gains on it?
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Feb 1, 2012
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jeffyjai wrote: Question: Does transferring from an open to another open account in cash proc capital gains? For example, I currently have an investment account at Tangerine and would like to transfer it to Quest Trade - since Tangerine would have to sell the shares first before transferring in cash to Quest Trade, would there be capital gains on it?
Transferring cash from one bank or broker account will not incur capital gains taxes.

It is the sale of a security that causes capital gains (or losses) to be realized, which is what triggers capital gains taxes in non-registered accounts. If you sell a security in a non-registered account and leave it in the same account, that would cause any capital gains to be realized. Then transferring the cash to another account is not a taxable transaction.

You can avoid realizing capital gains when switching brokers by transferring "in kind" which is transferring the existing shares to another broker without any sale.

In your example, I doubt if Tangerine funds could be transferred to any other broker, so yes, capital gains taxes would be due on any realized gains.

If you have a large capital gain (enough to bump you up into the next marginal tax bracket), consider spreading the sale transaction over two or more years, in order to avoid having some of the gains taxed at a higher rate. You can find Canadian tax rates by province here: https://www.taxtips.ca/marginaltaxrates.htm
I solemnly swear, to never assume I have an inkling at which direction the market will head, and to never make any investments based on a timing strategy.
Member
Jan 22, 2006
400 posts
23 upvotes
Toronto
Thanks!
Deepwater wrote: Transferring cash from one bank or broker account will not incur capital gains taxes.

It is the sale of a security that causes capital gains (or losses) to be realized, which is what triggers capital gains taxes in non-registered accounts. If you sell a security in a non-registered account and leave it in the same account, that would cause any capital gains to be realized. Then transferring the cash to another account is not a taxable transaction.

You can avoid realizing capital gains when switching brokers by transferring "in kind" which is transferring the existing shares to another broker without any sale.

In your example, I doubt if Tangerine funds could be transferred to any other broker, so yes, capital gains taxes would be due on any realized gains.

If you have a large capital gain (enough to bump you up into the next marginal tax bracket), consider spreading the sale transaction over two or more years, in order to avoid having some of the gains taxed at a higher rate. You can find Canadian tax rates by province here: https://www.taxtips.ca/marginaltaxrates.htm
[OP]
Newbie
Jun 3, 2019
52 posts
15 upvotes
@xgbsSS what do you think? Can I move my funds from the cash in non registered to tfsa or rrsp without any tax obligations?
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May 11, 2014
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AnnCook wrote: @xgbsSS what do you think? Can I move my funds from the cash in non registered to tfsa or rrsp without any tax obligations?
There is no tax obligations in terms of moving these funds into these types of accounts provided you have the contribution room. But based on the fact you made some money on the funds you will have some capital gains and probably some dividend/interest income to declare this year. If you were invested in funds at TDWaterhouse, they will send you a T5 receipt and a T5008 early next year outlining the distributions and capital gains taxable.

Curious, what fund did you purchase if you could not handle the ups and downs of the fund? How long did you invest in these funds? If these funds are for long term investing (since you plan to be placing them into your RRSP, TFSA), why were you checking so often? You will pay taxes but I think there is a larger behavioral problem to your investment approach that may be hindering your financial goals that needs to be addressed, although it could also be the funds that were selected for your investment Could you tell me the name of your fund (s) that your TD advisor set you up with? Could you explain a bit more into your fears you felt with the funds? Do you have other financial obligations or worries at the moment which has you fearing about the money you have invested? Feel free to post or PM me and we can discuss this.
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Dec 4, 2007
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id like to know if i buy some share in 2019 and did not sell them before the end of 2019 and decide to sell them in 2020...

do i have to report anything in 2019? even is the stock "example" gain 20%?

thank you!
Deal Addict
Oct 4, 2009
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HyperTech wrote: id like to know if i buy some share in 2019 and did not sell them before the end of 2019 and decide to sell them in 2020...

do i have to report anything in 2019? even is the stock "example" gain 20%?

thank you!
Nothing with regards to capital gains. Only need to report any income received but that will show up on tax forms you will receive.
[OP]
Newbie
Jun 3, 2019
52 posts
15 upvotes
I had invested TDB622C, TDB911C, TDB622C since October 2017.

If you remember from one of my earlier threads, we are saving up towards a downpayment to buy a house soon. Seeing the crazy fluctuations in the beginning of the year, I couldn't deal with the changes thinking that we would need to buy this year. But due to personal reasons and seeing the housing market, we might push out buying for a year or so. In hindsight I should have just waited because we changed plans later on.

Now my plan is to move money from here to our TFSA and RRSP to max out the quotas. What should I invest the remaining funds in this account? CCP strategy TD eseries? or GIC?

xgbsSS wrote: There is no tax obligations in terms of moving these funds into these types of accounts provided you have the contribution room. But based on the fact you made some money on the funds you will have some capital gains and probably some dividend/interest income to declare this year. If you were invested in funds at TDWaterhouse, they will send you a T5 receipt and a T5008 early next year outlining the distributions and capital gains taxable.

Curious, what fund did you purchase if you could not handle the ups and downs of the fund? How long did you invest in these funds? If these funds are for long term investing (since you plan to be placing them into your RRSP, TFSA), why were you checking so often? You will pay taxes but I think there is a larger behavioral problem to your investment approach that may be hindering your financial goals that needs to be addressed, although it could also be the funds that were selected for your investment Could you tell me the name of your fund (s) that your TD advisor set you up with? Could you explain a bit more into your fears you felt with the funds? Do you have other financial obligations or worries at the moment which has you fearing about the money you have invested? Feel free to post or PM me and we can discuss this.
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May 11, 2014
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AnnCook wrote: I had invested TDB622C, TDB911C, TDB622C since October 2017.

If you remember from one of my earlier threads, we are saving up towards a downpayment to buy a house soon. Seeing the crazy fluctuations in the beginning of the year, I couldn't deal with the changes thinking that we would need to buy this year. But due to personal reasons and seeing the housing market, we might push out buying for a year or so. In hindsight I should have just waited because we changed plans later on.

Now my plan is to move money from here to our TFSA and RRSP to max out the quotas. What should I invest the remaining funds in this account? CCP strategy TD eseries? or GIC?
Part of the problem I'm seeing here is that you have no concise strategy for your funds. You were saving for the downpayment, but you waivered and sold early. The fluctuations in the value of your funds is normal. We had a slight correction end of 2018 and a fairly nice recovery 2019 so the value of your funds should have dropped only to recover. Unfortunately you missed out on the recovery.

If what you are telling me is that the Monthly Income Fund and e-Series International Index Fund (you put TDB622 twice so is there one more?) was a way to save for a downpayment, then there are issues here because a downpayment in 3-5 years time shouldn't really be in equities due to the potential.

The thing is I can't tell you what to do with your funds because you have no set goals in place. You decided to pros-pone your house purchase, so your funds are idle. The part that also concerns me is the fact you had TFSA and RRSP room so you were pretty much holding non-registered funds for no reason.

First, what are you investing in your RRSPs and TFSAs? And what are your intentions for these funds. If it is for retirement, they should be equity focused to maximize growth considering your age. If part of the funds are intended for home purchase and the plan is within a short time frame, you can plan accordingly. For instance, holding $25k in HISA or GICs in an RRSP will allow you to easily access the homebuyer's plan and allow you to invest the rest for the purposes of retirement.

For your non-registered, it will really depend. For example, how much are we looking at here? You said previously this was intended for a home purchase, but is that still in the cards? If it is, what amount would you need for that goal? Is part of this cash for emergencies?

The problem is you haven't stated anything in terms of this making this question impossible to answer. What I can tell you is that while your risk tolerance seems lower which is not a bad thing in itself, you need to keep in mind the risk in being unable to grow your money effectively in the long term by keeping conservative. Yes equities fluctuate and if you needed the cash in the short term, then the funds you had were not appropriate. However, if these were for the long term, then what you effectively have done is sell early and lost yourself the gains that do come with long term investing. Remember, the economy keeps ticking, companies stay existing and a market will always be buying from many companies and companies make money of these consumers. Therefore while there could be economic crises, the economy generally recovers and markets follow suit.

https://economictimes.indiatimes.com/ma ... s?from=mdr

This is one of many articles that talk about fear. I think in your case, you need to hash out a plan that encompasses what can happen while embracing the investments that will ultimately help you out. Write down your financial goals and needs, prioritize them and think about the way for you to get there. For instance, you could prioritize having $50000 toward a downpayment and say you plan to have that in 5-8 years. In order to have that, consider the amount you would need to save each month to do that. Look at the interest rate that you could earn to get there. If you invest in funds to do that, look at the possible return you can get. Also consider what would happen if you invested in funds and they drop 20% Do es this still change your plan? etc.

Second, you need to keep consistency. When you sold your funds, you pretty much took a sudden u-turn from your plan. A plan where you make sudden changes means you lose out on your preparation and can hurt you financially. In this case, you probably lost out on some of the gains. A plan as discussed above should help you allay your fears and allow you to keep consistency.

Third, have some way of investing your money and not look at it . Once a year or 6 months should be plenty for long term investments, and the only thing noted should be is this consistent with what assets I am holding.

Feel free to discuss what you want. Remember, the lack of details means no-one can help you. Again, PM is also an option should you not feel comfortable disclosing on the forum.
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