Calculate the tax impact of transferring shares to a TFSA, RRSP, or another broker. See deemed gains, denied losses, and contribution room consumed.
When you transfer securities "in kind" (rather than cash) into a registered account like a TFSA or RRSP, the CRA treats it as if you sold the shares at fair market value and immediately repurchased them inside the registered account. This "deemed disposition" triggers a capital gain if the FMV exceeds your ACB.
The most dangerous trap is transferring shares at a loss. Unlike selling on the market, the CRA denies the loss entirely — you cannot claim it on your return, and it does not get added to the ACB inside the registered account. The loss vanishes permanently. This makes the "sell first, then contribute cash" strategy critical for losing positions.
Transfers between taxable accounts (e.g., switching brokers) are NOT dispositions. Your ACB carries over, there is no tax event, and no Schedule 3 reporting is required. The key distinction is the destination: registered account = deemed disposition; another taxable account = no disposition.
Transferring shares from a taxable account to a TFSA triggers a deemed disposition at fair market value (FMV). If the shares have appreciated, you realize a capital gain and owe tax. The TFSA contribution room used equals the FMV on the transfer date, not your original cost. Once inside the TFSA, all future growth is tax-free.
Yes. Under subsection 40(2)(g)(iv) of the Income Tax Act, capital losses on transfers to registered accounts (TFSA, RRSP, RESP) are denied — permanently. The loss does not get added to the ACB inside the registered account. The better strategy is to sell the shares, crystallize the loss, wait 31 days, then contribute cash and rebuy inside the TFSA.
Same as TFSA: a deemed disposition at FMV. Capital gains are taxable. Losses are denied. The FMV becomes your RRSP contribution amount, reducing your contribution room. Additionally, the RRSP contribution generates a deduction that offsets some or all of the capital gains tax — making in-kind RRSP contributions with gains particularly tax-efficient.
No. An in-kind transfer between non-registered accounts at different brokers (e.g., moving from Questrade to Wealthsimple) is NOT a disposition. Your ACB carries over unchanged. There is no tax event — just a change of custodian. Make sure you track the ACB correctly in your new account.
The contribution room used equals the fair market value on the date of transfer — regardless of what you paid (ACB). If shares are worth $10,000 on transfer date but you paid $5,000, the full $10,000 counts against your TFSA room. This is why some investors prefer to sell and contribute cash — it gives them control over the exact dollar amount.