Capital gains in a TFSA or RRSP

Capital gains realized inside a TFSA are never taxed — not on the way in, not while they grow, and not when you withdraw. Gains inside an RRSP are also untaxed while they compound; the difference is that RRSP withdrawals are taxed as ordinary income, so an RRSP defers tax rather than eliminating it. In neither account do you track ACB or file Schedule 3 for internal trades.

Because the account is sheltered, a loss inside a TFSA or RRSP cannot be claimed. Sell a holding at a loss in registered space and it simply vanishes — you can’t use it to offset gains in your taxable accounts. This is a real cost of holding volatile positions in registered accounts and a reason many investors keep loss-prone or actively traded names in non-registered accounts.

Here’s the asymmetry that catches people: if you sell a security at a loss in your non-registered account and buy the identical security in your TFSA or RRSP within 30 days, the loss is denied and permanently lost — it isn’t even added back to an ACB, because the registered account has none to adjust. See our superficial loss rule guide.

Growth inside a TFSA does not use up contribution room, but day-trading a TFSA can draw CRA scrutiny — frequent, business-like activity may be reassessed as taxable business income even inside the account. Registered accounts shelter investing, not a trading business.