Tax Free Savings Account -Go open one!!

[Reef_Geek]

Originally Posted by Reef Pilot

TFSA's are great for stock trading. All your profits are tax free, and makes it a lot easier to do your taxes in April if you are a frequent trader. And all capital gains expand your account, so you have more and more room to make some decent trades.

I always wondered about that. Because I don't have time to research for day trading (given that I spend so much time on CanReef), I buy mutual funds and don't really churn the portfolio a whole lot.

So with a TFSA stock trading account... does it work like...

put $5K annual limit into the account, whatever stocks you sell aren't considered withdraws as long as you keep it within the investment cash account... and whatever else stocks you purchase using funds internal to the account aren't considered as further (over) contributions... even though your total holdings have grown from capital gains...

is this how it works with TFSA trading accounts?