Closing a TFSA
Moderator: Mark T Serbinski CA CPA
Closing a TFSA
Are there any considerations that need to be taken into account when closing a TFSA in Canada as a dual citizen residing in the US? The TFSA account is with a brokerage and contains various ETFs. I would like to close this account and transfer the securities into a US based margin account but am wondering if there are things I should be aware of before proceeding with this. Any advice is much appreciated.
Well, for the year you still have it, you are still on the hook for trust and PFIC reporting. Some ETFs may not be transferable, particularly if they are not traded on US markets (this would be by the brokerages rules, not any regulation).
From a Cdn point of view there is nothing special to do.
From a Cdn point of view there is nothing special to do.
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Is this true for a TFSA GIC account in Canada? I am resident in US and have TFSA GIC account where the institution allows me to pull money before the maturity date and close the TFSA account. I filled up trust documents (3520) for it for 2017 taxes, would I still do it for 2018 taxes submittals next year?
If your TFSA is a trust, and it was still in existence in 2018, then you must still file 3520, etc and report any income.
If you closed it before 1/1/2018, then there is nothing to do for 2018.
If you closed it before 1/1/2018, then there is nothing to do for 2018.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
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Re: Closing a TFSA
When you say 'investment income' after closing a TFSA GIC account, does that mean the principal + interest or just the interest that is generated by the GIC? For example, if I had 5000$ principal in a TFSA and I decided to close it, and after closing if I am receiving 5050$ (principal = 5k$ + interest = 50$); would I ONLY be reporting 50$ as interest (on form 1040 schB) or would I report $5050 as income and add that to my gross pay (f1040 sch1 box21)? Thank you in advance for clarifying.