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Date: 1/1/2009 4:11:49 PM
Author: Wayneman Country Flag
Subject: 12258/19638 - can you get a DRIP TFSA?
 
 
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slimshady on 1/1/2009 2:33:46 PM

I'm interested in registering a single share and enrolling in a DRIP plan that offers a SPP.
Is it possible to have a DRIP set up as an Tax Free Savings Account (TFSA)?
I've seen on CIBC Mellon's site they make reference to a CIBC Mellon Trust RRSP but can't find any additional info on how you'd get them to set up a DRIP as an RRSP and no reference is made about TFSAs.

David.

Wayneman on 1/1/2009 3:11:49 PM

s it possible to have a DRIP set up as an Tax Free Savings Account (TFSA)?

No.

You may however find a broker that will set up a TFSA that allows you to buy stocks and lets you synthetically DRip the dividends but you won't be able to buy more shares fee free.

TCadd on 10/25/2009 3:50:40 PM

Yeah, that is what my looking around had led me to believe as well... Bummer, but good to have an answer before I even ask the question!

bryeguy on 11/17/2010 12:08:19 PM

Sure. Open a TFSA. Transfer stock in (as a share certificate in your name). Advise your broker you would like to DRIP the dividends. Transfer out any residual cash (they'll only DRIP full shares) and use the company's SPP to convert the residual cash into shares. In the following year you can deposit another share certificate for that year's contribution which will include a few extra shares from your SPP contributions. Check that your broker will not charge for taking your contribution as a share certificate.

capnsparrow on 1/26/2011 8:51:06 AM

Note that as I understand it, this method will potentially incur capital gains every time you move shares from your DRIP to your broker. This is considered a sale and rebuy, even though it's just a transfer to yourself.

ADUFFY on 1/26/2011 1:29:22 PM

That is correct. You are not just transferring according to Revenue Canada. You are "selling" a security which is a deemed disposition and then sheltering future cap gains by placing those same shares in a Tax free account. For this reason I have moved REI.UN, PVE.UN and FAP to my TFSA in this manner as I believe in three things:

1. There is little or no capital gain in the initial transfer process
2. I want to shelter future capital gains
3. I want to shelter future dividends, and particularly in the case of FAP, interest bearing dividends.

dschiffers on 7/21/2014 2:46:36 PM

I am considering buying my future shares through BMO investorline account TFSA. Doing this means they will keep track of all ACB. What are the negatives to doing it this way as apposed to doing an OCP with the transfer agent and then moving the money?

aB on 7/21/2014 9:06:26 PM

With a brokerage, every time you want to buy shares, you will have to (1) buy whole shares, (2) pay the brokerage fee. Also, dividends will only DRIP if you can purchase a whole share.

At the transfer agent, you do not have to buy whole shares*, and dividends will be completely reinvested (able to purchase partial shares).

So if you are just starting, and you have a lot to invest, brokerage could work. For smaller accounts, OCPs through the TA will better make use of your money (less money paid to fees).

* there may be minimum OCP requirements.

studog on 7/26/2014 12:06:49 PM

dschiffers on 7/21/2014 2:46:36 PM:
I am considering buying my future shares through BMO investorline account TFSA. Doing this means they will keep track of all ACB.

A quick google shows that any figure (if any) they may be providing is possibly inaccurate.

I strongly recommend you do this yourself; it's not difficult and takes very little time.

...Stu

mesloan on 7/28/2014 3:53:53 AM

I thought once cash is in a TFSA and anything done within is tax free - Is there a reason to track ACB for buy and sell within the TFSA?

MES

Wayneman on 7/28/2014 4:42:50 AM

Is there a reason to track ACB for buy and sell within the TFSA?

No.
Only for your own info.

Derrico on 7/28/2014 6:36:21 AM

Am I the only one who actually enjoys keeping track of their ACB? I have a tab for each company with a summary of shares purchased along with cost to easily calculate it. Then I have another tab with a calendar showing which stocks pay divis which month. I have each tab linked to the calendar and it therefore automatically populates. I enjoy seeing my annual divi total increase with my recording of each ACB.

Cal on 7/28/2014 10:04:11 AM

I am sure that there are many of use that enjoy keeping track of our growing income.

Enjoy!

rimshot on 7/31/2014 6:27:54 AM

Derrico - would you mind sharing your spreadsheet?

Derrico on 7/31/2014 12:37:10 PM

Sure I'll email it to you.
 
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