TFSA room after a sale: why a gain does not add room
A winning trade does not grow your TFSA room. Cash leaving the account does. Enter the numbers and see the room before and after.
How it works: the room you have today already counts the shares you bought. A sale inside the account does not touch it, so the gain or loss changes nothing. Room only comes back when cash leaves the account. The amount that comes back is the amount you take out. Enter your own rule for when it comes back.
The mix-up
Many people think a winning trade grows their room. It does not. A $1,000 gain is $1,000 more in the account, not $1,000 more room. The room moves when you put cash in or take cash out. See TFSA options and TFSA vs RRSP for options.
Losses stay lost
Buy $5,000 of shares and sell them for $4,000. Take out the $4,000. Only $4,000 of room returns. The other $1,000 of room is gone. The rules by account type are in the options rules by account.
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