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The CRA is Watching TFSA Holders: Here Are Some Red Flags to Avoid

The article from Fool.ca discusses how the Canada Revenue Agency (CRA) is closely monitoring Tax-Free Savings Account (TFSA) holders to ensure compliance with tax laws. It highlights several red flags that could attract CRA scrutiny: frequent day trading within a TFSA, which might suggest the account is being used for business activities rather than passive investment; over-contribution to TFSAs beyond the annual limit, which incurs penalties; engaging in transactions with non-arm's length parties, like buying assets from family members at non-market rates; and using borrowed money to invest in a TFSA, which could be seen as an attempt to circumvent tax rules. The article advises TFSA holders to be aware of these practices to avoid potential audits and penalties, emphasizing the importance of understanding and adhering to the rules governing TFSAs.

Read the Full The Motley Fool Canada Article at:
[ https://www.fool.ca/2024/12/04/the-cra-is-watching-tfsa-holders-here-are-some-red-flags-to-avoid/ ]