Investing

Stocks in a TFSA

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  • Oct 7th, 2019 1:44 pm
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[OP]
Deal Addict
Nov 26, 2011
2077 posts
224 upvotes
Ottawa

Stocks in a TFSA

I am looking to open a TFSA with Questrade. I already have another account with them and therefore because balance is over $5000 I will not be charged inactivity fees according to them. I read online somewhere that in a TFSA one should not hold stocks on the NYSE and should only build using the TSE. Something mentioned about withholding tax. So say currently I got $5000 to put into a TFSA. How many stocks should I be looking to get what that. I will eventually diversify my TFSA with different sectors but currently looking at companies such as BNS (Scotiabank), CM (CIBC), Great-West Lifeco (GWO), etc. Does anyone have any other suggestions of what to get?

My RESP on the other hand is invested in XAW, VCN, ZAG ETF's.
13 replies
Member
May 18, 2017
440 posts
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Toronto, Ontario
You can hold US stocks inside your TFSA with almost no issues. If they pay a dividend, you'll lose 15% of the dividend. Thats all
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User avatar
Sep 30, 2001
28718 posts
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Toronto
masoud100 wrote: I read online somewhere that in a TFSA one should not hold stocks on the NYSE and should only build using the TSE. Something mentioned about withholding tax.
as mentioned above, it matters if you have dividend paying equities
https://www.moneysense.ca/save/investin ... in-a-tfsa/
https://www.moneysense.ca/save/taxes/is ... a-or-rrsp/
https://business.financialpost.com/pers ... end-stocks

as for stock picking, you won't get a definitive answer. figure out what your goals are, what your risk tolerance is, if you want growth, dividend-paying, defensive (etc) type of companies, and so on. Certainly a Bank stock is a good building block, but you're getting duplication as it will be a part of VCN.
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Deal Guru
Feb 9, 2009
11389 posts
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Some names to consider:

Banks: Scotiabank, Td, royal, Cibc or BMo

Pipelines: enbridge or tc energy

Utilities: Emera, fortis, Canadian utilities

Telecom: bell, telus or Rogers

Canadian national railway

Brookfield inf
Newbie
Jan 21, 2017
55 posts
31 upvotes
If investing in Dividend paying stocks, I always thought:
1) Taxable Account = Canadian Stocks for eligible dividend tax break
2) RRSP = US Stocks as no dividend tax withheld and for international diversification.
3) TFSA = Intl stocks from countries with no dividend tax withheld and for international diversification, examples are UK based RDS.B, BBL etc.

But for OP, sounds like only current account is RESP.
Sr. Member
Oct 21, 2016
919 posts
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Max out your TFSA with following Apple , Visa , Microsoft , MasterCard, Disney , BAM , Shopify hold all long .
Deal Addict
Jun 18, 2018
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Toronto
whatyoulookinatbud wrote: You can hold US stocks inside your TFSA with almost no issues. If they pay a dividend, you'll lose 15% of the dividend. Thats all
I found this to be true as well but question. Can you deposit US dollars into a TFSA or does it have to be Canadian and pay the conversion fee when you buy/sell a stock? If you can deposit US dollars in a TFSA, how does the contribution room work then? (ie. how do they calculate the equivalent Canadian dollar value).
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Sep 30, 2001
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Electrah wrote: Can you deposit US dollars into a TFSA
Yes. Some (all?) institutions will convert the value to CDN and report that to CRA.

"When you contribute foreign funds to a TFSA, the institution that issued the TFSA is responsible for converting the funds to Canadian dollars on the date of the transaction. This is the amount that is then reported to CRA. You would need to contact your TFSA issuer to find out the exact amount they reported."

https://www.moneysense.ca/save/tfsa-con ... questions/
We're all in this together. Be kind and civil with one another
Sr. Member
Oct 21, 2016
919 posts
682 upvotes
Electrah wrote: I found this to be true as well but question. Can you deposit US dollars into a TFSA or does it have to be Canadian and pay the conversion fee when you buy/sell a stock? If you can deposit US dollars in a TFSA, how does the contribution room work then? (ie. how do they calculate the equivalent Canadian dollar value).
Contribute Canadian dollars and convert to US by journaling an interlisted security to minimize fees . Pretty easy
Member
May 18, 2017
440 posts
225 upvotes
Toronto, Ontario
Electrah wrote: I found this to be true as well but question. Can you deposit US dollars into a TFSA or does it have to be Canadian and pay the conversion fee when you buy/sell a stock? If you can deposit US dollars in a TFSA, how does the contribution room work then? (ie. how do they calculate the equivalent Canadian dollar value).
Depends on institution? Value will be calculated depending on the day's exchange rate as CAD. Easiest thing to do is to do Nortbert's gambit with DLR and DLR.U
Deal Addict
Jun 18, 2018
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MrDisco wrote: Yes. Some (all?) institutions will convert the value to CDN and report that to CRA.

"When you contribute foreign funds to a TFSA, the institution that issued the TFSA is responsible for converting the funds to Canadian dollars on the date of the transaction. This is the amount that is then reported to CRA. You would need to contact your TFSA issuer to find out the exact amount they reported."

https://www.moneysense.ca/save/tfsa-con ... questions/
whatyoulookinatbud wrote: Depends on institution? Value will be calculated depending on the day's exchange rate as CAD. Easiest thing to do is to do Nortbert's gambit with DLR and DLR.U
Right, so to ensure I don't over contribute, I would just do my own conversion on the exchange rate on that day?

Which bank is best regarding journaling over shares?
Member
May 18, 2017
440 posts
225 upvotes
Toronto, Ontario
Electrah wrote: Right, so to ensure I don't over contribute, I would just do my own conversion on the exchange rate on that day?

Which bank is best regarding journaling over shares?
they can all do it.

There's a bunch of youtube videos by Justin Bender with STep by step guides. search it up and its very easy to do!
Deal Addict
Sep 13, 2004
3604 posts
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Toronto
I'm pondering what to buy for a TFSA. Unit trusts were ideal: a lot of taxable income (that won't be taxed). The only Unit trusts that are left are REITs.

Am I wrong?

What REITs are a good idea at the moment? Hint: the very highest payouts are a sign of danger.

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