Question about TFSA

[CottageDog]

This is probably a dumb question but I can't seem to find this info anywhere.
What is the current contribution limit for TFSA's? Is it $5,000 or $10,000? Basically what I'm asking is: has the TFSA been in effect for 1 or 2 tax years now.

[chinamansteve]

TFSA came out Jan 2009, so it's the first year therefore the contribution limit is only $5000. :)

[CottageDog]

Thanks for the response.
I have a follow up question to that.

I am thinking of transferring some stock I have in an iTrade account into a TFSA. My question is about how the $5,000 limit is valued when transferring in. Can I only transfer in $5,000 at the current market value for those holdings, or is it $5,000 worth of stock at the price I paid for them?

Also I am wondering if I should hold off before doing this. My company has an employee stock purchase plan twice a year where I can buy our stock at 15% less than market value. September is the next time I can do this, I am thinking of buying the stock through the ESPP in my TFSA account and then selling the stock right away for the 15% gain. Would I be able to move the original amount out of the TFSA (leaving only the 15% gain sitting in there) and then move up to $5,000 worth of stocks into the TFSA?

[joe1487]

Thanks for the response.
I have a follow up question to that.

I am thinking of transferring some stock I have in an iTrade account into a TFSA. My question is about how the $5,000 limit is valued when transferring in. Can I only transfer in $5,000 at the current market value for those holdings, or is it $5,000 worth of stock at the price I paid for them?

$5,000 of market value (which is a good thing in these depressed markets). It's also a deemed disposition, I believe.

[ray420]

It will be $5000 of market value, HOWEVER BE CAREFUL! it will be deemed disposition and you will have be taxed on capital gains BUT CAN NOT CLAIM CAPITAL LOSSES so just be careful with it.

Here is TFSA FAQ (http://financialhighway.com/tax-free-savings-account-tfsa-faq/)might be helpfull