Question

Mini-Case D: (1.5 marks-.5 marks each) We are February 13, 2020. Gino is 60 years old and has always made the maximum yearly contribution to his Tax-Free Savings Account (TFSA) at the beginning of each year. He has never withdrawn from his TFSA to date. (see Table C) a) Gino has already maximized his 2020 TFSA contribution, what is the total amount that Gino has contributed to his TFSA to date since the plan's inception? (.5 mark) Response: (.5 mark) b) The market value of Gino's contributions is $89,325 as of February 13, 2020. If Gino were to withdraw this entire amount to go on a trip around the world, what is the earliest date that Gino could re-contribute to his TFSA without triggering penalties? (Highlight/underline your response) (.5 mark) February 13, 2020 (same day) or March 13, 2020 (1 month later) or February 13, 2021 (1 year later) or January 1, 2021 (first day of the following year) or or another date: c) What is the maximum amount that Gino could re-contribute to his TFSA on the date you selected in b) without triggering penalties: (.5 mark) Response: (.5 mark)

Answer 1

answer :

(a). From the given data we find that Gino has never skipped the maximum contribution to TFSA since its inception in 2009

Hence, its cumulative contribution till date (2020) is $69,500

(b) January 1, 2021 (First day of the following year)

(c). TFSA contribution for a particular year is the sum of

Annual TFSA dollar limit + Unused TFSA contribution room from the previous year + withdrawals made from the TFSA in the previous year

Maximum amount that Gino can re- contribute is = Withdrawal + Annual TFSA dollar limit

= $89,325 + $6,000

= $95,325