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How the Tax-Free Savings Account Will Work
: Q8 R+ x. i5 C: l+ cStarting in 2009, Canadian residents age 18 or older will be eligible to contribute up to $5,000 annually to a TFSA, with unused room being carried forward. # Z5 L% d. A4 |7 y
Contributions will not be deductible. 1 M7 H+ E& T: M) ?& O1 s/ g6 F
Capital gains and other investment income earned in a TFSA will not be taxed. ; ^* ~9 x$ L X [8 C
Withdrawals will be tax-free. 8 B- O2 b: T' W
Neither income earned within a TFSA nor withdrawals from it will affect eligibility for federal income-tested benefits and credits. 0 v) c3 v# m4 c5 H B, v
Withdrawals will create contribution room for future savings. 2 R1 g/ d+ ^/ R2 ?" R
Contributions to a spouse’s or common-law partner’s TFSA will be allowed, and TFSA assets will be transferable to the TFSA of a spouse or common-law partner upon death.
% @4 ^/ j# x! r. i/ s/ FQualified investments include all arm’s-length Registered Retirement Savings Plan (RRSP) qualified investments.
5 [0 s9 l1 L* \. J! Q- [The $5,000 annual contribution limit will be indexed to inflation in $500 increments. |
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