Author Topic: TFSA, CRA and a fucking crook  (Read 3185 times)

Kitsunegari

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TFSA, CRA and a fucking crook
« on: August 04, 2015, 09:43:25 AM »
I'm fucking raging.
Last year I decided to do something with my savings. I ask to a few workmates how they invested their savings, and one recommended me his financial advisor. I know nothing about finance and I have a really hard time educating myself on stuff I find boring, so I meet the guy and I take him as my financial advisor. We go through all my assets, how much I have in which kind of account, and he had me move my money from a TFSA I had with my bank to a TFSA with his company.
Fast forward a year, yesterday I get a letter from the Canada Revenue Agency, which states that I contributed too much to my TFSA and I need to pay almost 1k of fine. Turns out that if I withdraw money and I put it back in during the same financial year, it just counts as extra contribution and it's heavily taxed.
What enrages me is that I'm sure that fucking bastard knew it, because it's his bloody job, and he just omitted the info.
Is anyone else been in the same situation? Can I just explain the situation and implore their  mercy?
And please spare me the facepunches over the fact that I trusted a fucking finance guy, of all people, I'm already kicking myself enough. 

Also, I don't intend leaving my money to that crook. What can I do now?
« Last Edit: August 05, 2015, 01:27:49 PM by Kitsunegari »

Jack

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Re: TFSA, CRA and a fucking crook
« Reply #1 on: August 04, 2015, 09:58:44 AM »
Fast forward a year, yesterday I get a letter from the Canada Revenue Agency, which states that I contributed too much to my TFSA and I need to pay almost 1k of fine. Turns out that if I withdraw money and I put it back in during the same financial year, it just counts as extra contribution and it's heavily taxed....
Is anyone else been in the same situation? Can I just explain the situation and implore their  mercy?

I'm not sure if you can do anything about it after the fact, but if Canadian retirement accounts are anything like US retirement accounts, there should have been a way to do a "rollover" or "transfer" between account issuers which would not have generated a taxable event the way a "withdrawal" and "deposit" would. Check the Canadian tax code to see if there's a way to re-characterize the transactions after the fact.

This page may be of some help.

Also, I don't intend leaving my money to that crook. What can I do now?

Once you figure out the right way to do a transfer between issuers, do another one to an issuer that doesn't suck.

lostamonkey

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Re: TFSA, CRA and a fucking crook
« Reply #2 on: August 04, 2015, 10:05:59 AM »
A lot of people do not understand the TFSA rules and made the same mistake as you. Just pay the CRA fine, stop investing with this financial advisor and move on. And there is no way to recharacterize your payments unfortunately.

Cpa Cat

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Re: TFSA, CRA and a fucking crook
« Reply #3 on: August 04, 2015, 10:10:54 AM »
I'm not sure how things work in Canada, but I would contact the guy and tell him you plan to sue him for your damages (in the US we can do small claims at very little cost - can you in Canada?). You may not even have to file the suit. Here, most financial advisors have E&O insurance, and such claims can be made against their insurance.

E&O stands for Errors and Omissions. Not informing you of the fine would be an omission - I daresay.

Here you would also likely be able to lodge a complaint against him with whatever the securities licensing entity is. You can also lodge a complaint with Investors Group.

Dominator

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Re: TFSA, CRA and a fucking crook
« Reply #4 on: August 04, 2015, 10:16:43 AM »
I'm not sure if there is any way out of paying this fee to the CRA.

But you could have transferred your TFSA from your existing financial institution to the new one and it probably would have only cost about $50 in transfer fees. Next time just do that, or wait until the end of December to withdraw everything, then at the start of January you can deposit it into a new TFSA somewhere else and avoid paying any transfer fees entirely.

Heckler

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Re: TFSA, CRA and a fucking crook
« Reply #5 on: August 04, 2015, 10:34:37 AM »

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Jack

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Re: TFSA, CRA and a fucking crook
« Reply #7 on: August 04, 2015, 10:49:25 AM »
E&O stands for Errors and Omissions. Not informing you of the fine would be an omission - I daresay.

Either that, or mischaracterizing the transfer as a withdrawal + contribution would be an error.

zephyr911

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Re: TFSA, CRA and a fucking crook
« Reply #8 on: August 04, 2015, 01:53:39 PM »
E&O stands for Errors and Omissions. Not informing you of the fine would be an omission - I daresay.

Either that, or mischaracterizing the transfer as a withdrawal + contribution would be an error.

This could have been quite possibly a clerical error. Definitely take this information to the advisor and ask why it happened.