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Strategies & Market Trends : Underexposed Technical Analysis -- Ignore unavailable to you. Want to Upgrade?

To: robert b furman who wrote (771)	2/16/2020 10:00:49 PM
From: Underexposed	Respond to of 914

Hi Robert Being Canadian I sometimes forget there are some differences between the Canadian Stock market operations and American. For example there is much less paperwork involved . It seems for Capital Gains Americans have to take into account when the shares were purchases of a single stock and their cost then when you have made multiple purchases. In Canada we don't have to do this we just take the average purchase price. If you don't sell all the holdings the residual simply has the previous average price. Our Tax free accounts differ from yours. we have two main types. 1) Tax Free Saving Account (TFSA) this account has a limited deposit each year which started at $5000 about 10 years ago but I think it has risen to $6000 per year. If you did not contribute to that account at the start or you did not contribute for a year or more then these non-contribution years are sort of grandfathered and for example if you missed 2 years of $5000 then this year you could deposit $10,000 + $6000 = $16,000 with no penalty. There is no tax saving depositing the money into the account. Whatever the investment is (not limited to a saving account) grows tax-free under this umbrella. But let's say you need $20,000 from this account to purchase something (a car for example) then you can withdraw the money from the account with no penalty except that the money withdrawn is subject to normal income tax (but if you spend it right away there would be no income tax on it)....NOT ONLY THAT but the following fiscal year you could put the $20,000 + your normal contribution back into that account with no penalty. 2. Registered Retirement Savings Plan (RRSP) This plan has been around for over 40 years. Back then the government of the day wanted to encourage saving for your retirement. It hasn't changed much from the start. You are allowed to place 18% of your earned income into this account AND you would subtract this amount from your taxable income saving some income tax that year. I started when I was 25 years old and I put the maximum amount into this account every year til I retired. First into saving certificates then mutual funds and finally into Stocks. It was because of the tax free growth of these funds that I was able to retire at 54 years old. When you take out any money from this account you pay the income tax on this money as if it was normal income and of course once out of the account you would pay normal income tax on any earnings thereafter. There is a limit on how long you can hold this account. When you hit 71 years old, the account is converted to a Registered Income Fund (RIF) which is still tax free but the government requires you to remove money from the account (I think it is 5% of the fund's value...and pay tax on it as it is removed and the income on that money from this withdrawal is thereafter taxed normally.) I am facing this conversion soon but the forced withdrawal since I make usually double that amount in the account so it will still grow tax free. ********************* anyways... there are several differences between our countries and some times I get confused sometimes. UE