Colin Lynch

[music] >> Hello, I'm Greg Bonnell. Welcome to MoneyTalk Live, brought to you by TD Direct Investing. Every day, I'll be joined by guests from across TD, many of whom you'll only see here. We're going to take you through what's moving the markets and answer your questions about investing. Coming up on today show, we will discuss a couple of rule changes in the tax base, some deadlines you might want to be aware of. Nicole Ewing, Dir. tax and estate planning a TD Wealth will be here to discuss with us. We get our guest today, let's communicate on the markets. First trading day of the week, we have some green on the screen. We will start with Toronto, about 80 points, little 5/2 a percent. Even got the price of American benchmark crude pulling back. Some other names under substantial pressure including First Quantum. We will talk more about this later in the show. They are running into some problems with their copper mine in Panama. They are going to have a referendum and take the future life of that mind to the people. Right now at 20 bucks and $0.51, you got First Quantum down 26%. Baytex energy also moving lower on lower crude prices. Right now you got Baytex at 592, down almost 2%. South of the border, it's been a tough couple of weeks for the equity markets. The S&P 500 in positive territory today, 32 or 33 points, a little shy of a full percent. Of course, you got the Fed on deck this week. Higher for longer interest rates. What could it mean, a lot of intrigue heading into Wednesday. Checking out the tech heavy NASDAQ, beaten up in recent session. Putting 81 points on the table today, up a little bit more than half a percent. Some tech names under pressure making modest gains including Amazon. It's up a little more than 3% at hundred and 30 walk hundred and 31 bucks and change. And that's your market update. update. important changes in deadlines you may want to be aware of depending on your situation. Joining us now with more common Nicole Ewing, director of tax and estate planning a TD Wealth. Always a pleasure to have you on the show. >> Great to be here. >> You got a lot of things you want to share with us right now. I know you want to raise awareness about the underused housing tax deadline. First, walk us through the underused housing tax and tell us about the deadline. >> The underused housing tax is a tax on property that is underused or vacant and it generally applies to those who are nonresident, non-Canadian, foreign investors sort of thing so a lot of people may have looked over this and thought that it didn't apply to them but what's missing from that conversation is if you hold this property in a corporation or a trust, you're going to be subject to these rules. It doesn't mean you're going to have to pay tax, but you do have to file this return and the failure to file a return is a minimum of $5000. So this is a pretty hefty issue that people want to be thinking about. I'd like to flag for people that this is really applying to, as I said, if it is owned in a trust, a family trust, but if your name is on title to a property that you don't live in or have a beneficial interest in, you may be caught by these rules. For example, if I'm an elderly person and I've added my children on title just so that on my death the property can be passed to them without much effort, that means that your children could be regarded as holding the interest in trust for you and your estate and they should be filing and underused housing tax return. Similarly, if we have parents who may have added their names on title to help their children if there is a mortgage on the property or guarantee, they may have added their names and so if their name is on there as a legal owner, but they don't have a beneficial interest in the property, debts regarded as a trust subject to these rules. So caution. It's important to understand whether these rules apply to you. A lot of confusion about this because it was new last year and so the government extended the 2022 filing year to allow people to file by October 31, 2023, so Halloween is the due date where if you don't have this return filed, you may be subject to these very significant penalties. >> Significant penalties. Obviously, we are talking about Halloween on our doorstep. What should we will do if they've heard this conversation and said, I'm concerned about this. Obviously, they would need to speak with someone. >> I would recommend speaking with any financial advisor you are working with your accountant. If you don't have access to that on the short notice I would recommend just going online to Canada CA looking at the information that they provide an it actually has a very useful tool where you can put in your personal circumstances and it will tell you whether or not you have a filing obligation. Again, it does not mean that you need to pay tax, it just means that you might have a filing obligation if you have to pay tax as a second consideration but there is a tool available on Canada.ca that may help people navigate this. >> That's the first issue that you wanted to bring to our audience. What about beneficial trust reporting rules? What's going on there? >> Similarly, there these new rules that will require people to file a trust return. In the past, trust returns only needed to be filed by certain types of trusts in relatively narrow circumstances. So if they heading, or disposed of a capital interest. But the rules of change so that now really essentially any trust is subject to these filing obligations. There are exceptions for a qualified disability trust or a very small under $50,000 trust which only really owns cash or securities, so not real property, but those are really the only exceptions. There are a few more and you want to check into it. But for regular folks, if you have a family trust, again, if you are on joint accounts, if your name is on a property, these are trust reporting rules require you file a T3 am not going to be applicable for this year. If you currently have a trust, these rules do apply to you and you will have an obligation to file that in your return for next year. So again, many people not realizing that these rules apply to their trusts. That simply were you have legal ownership but don't have beneficial interest in the property. That is going to be caught by these rules as well and people will have a filing requirement perhaps that they've not had in the past. >> Based on this conversation in past conversations with you, there are certain things that fall into the bucket of water trust is that I had no idea that that's what a trust is. It seems like a tricky area. >> It is a very tricky area particularly when we talk about these rules, the reporting obligations of that the trustee now has, they must provide certain information on the trustees, the beneficiaries of the trust, anybody who's deemed to have influence over decisions that are made in a trust and when I say beneficiaries, it's not just the names person but upon their death it would go to contingent beneficiaries, those people are also considered beneficiaries for him the trust reporting must be done. I would say a very complex area that is probably not well understood at this point so I would encourage people to reach out to their tax or financial professional to help them figure out whether these rules apply. It might be that having a joint account is no longer the appropriate solution for you or having your name on a property is not going to be as beneficial as it may have been given these filing obligations that now might apply. If you have a property for example and you're on there is a legal but not beneficial owner, you may have the underused housing tax obligation as well as the new trust reporting obligation. So be mindful, it's not as easy as adding a name onto and account, there are other legal implications of doing that. >> Let's add one more thing to the list. Alternative minimum tax changes. A lot of changes to be aware of. >> There are a lot of changes. It's a bit of a challenge to stay up-to-date on what your obligations are and maybe some of the planning strategies that you have utilized in the past. Really for the alternative minimum tax, this is a tax that is intended to prevent high income earners from paying little or no tax and so the intent is there is an alternative or parallel calculation that includes or excludes certain types of deductions, credits, inclusion rates. If you owe money under this calculation which is higher than what you would've owed under federal tax owing, you will have to pay AMT. These rules are changing. We are looking at an increase in the rate from 15% to 20.5% but we are seeing a huge change in the exemption amount or the amount that you can earn without these rules applying to you. It's going from $40,000 to 173 but with certain types of planning, there's going to be different impacts and so we see many of the credits and deductions, the inclusion rates will change for those so some of that math will look a little bit different for those who have paid alternative minimum tax in the past or may have strategies that make themselves vulnerable to those sorts of things. A big one that people are missing when it comes to trust, topic of the day, is that there is no exemption amount or a trust in so that $173,000 will not get somebody, if you haven't, earning some type of income in your trust, you may be subject to these alternative tax rules and you won't get the benefit of that much larger exemption amount that has changed in the rules. Again, lots of bath needs to change. We need to look at our strategies holistically and see whether these tax changes have offset may be a little bit of the balance, how we wait to different variables when it comes our planning. >> A great start to the program. We will get your questions about tax and estate planning for Nicole Ewing and just a moment. You can get in touch with us at any time. Just email moneytalklive@td.com or fill out the viewer response box under the video player on WebBroker. Right now, let's get you updated on the top stories in the world of business and take a look at how the markets are trading. Shares of First Quantum minerals are in the spotlight today, down considerably. This on the heels of the president of Panama saying the country is going to hold a binding referendum on the miners Cobre Panama project asking the public whether the deal should be scrapped. The Vancouver-based copper miners signed a new contract with the government earlier this year but it has faced opposition from several groups in Panama. You can see the effect on the shares right now. At 20 bucks and change, you got First Quantum minerals down almost 28%. Higher prices for a big Mac and fries held power and earnings be for McDonald's this most recent quarter. The fast food giant said it grew its US same-store sales by almost 9% in those three months. Despite the slowdown in customer traffic. McDonald's is saying consumers making less than $45,000 annually are paring back their visits to the restaurant with those higher selling prices for this were so calming falling food to the bottom line. Strong travel demand lifted Air Canada's quarterly profits $1.25 billion in its most recent quarter in terms of profit. The air carrier says operating income more than doubled compared to the same period last year and it continues to be down its debt. However, Air Canada outlined to continue to manage risks out there including two political uncertainty, inflation and volatile fuel prices. Right now the stock is down about 1.8%. We will check in on the market, starting with the TSX Composite Index. He got the price of crude substantially lower today, dragging down the oil producers, some mining names are under pressure. The financials for the most part are doing the heavy lifting to keep us in positive territory. We are up 91 points, about half a percent. South of the border, on Wednesday, you got the US Federal Reserve out with the rate decision. Higher for longer interest rate. That's been beating up the markets as of late. Got a bit of green on the screen today. The S&P 500 up 34 points, a little shy of a full percent. We are back with Nicole Ewing, take your questions about tax and estate planning. First one. I have an RESP for my son who has now decided that he doesn't want to go to university. He turns 21 next year and I am planning to collapse it. It has a value of $120,000. I have contributed 50 K. We have 50 K contribution human RRSP. So that least 20 K to pay tax on plus the 20% penalty. If my marginal tax rate is 35%, how much total tax what I have to pay? Oh no, break out the calculate it. >> I did because you were kind enough to share these numbers with me in advance because I don't math very quickly. One thing I noticed in the question when it hit me was something is often it was that there was no repayment of the grant that would have been, that the government would have paid. So if you have, if you have invested into your RESP and you are not having it used for educational purposes and you want to collapse it and take your money out, you must remember that when you take out your contributions, you must also return the grant that was paid to you by the government, return that to them. No tax on your contributions or on the amount that you have are paid to the government. So if I go through the math here, we have, again, so it's at 21, which is great, but we need to meet the ten-year requirement as well. So assuming this has been in existence for 10 years, we have $120,000, we take the $50,000 back that we contributed. That leaves $70,000 remaining. And then we will return our RESP grants, the CSG, that is maximum $7200, I seem to buy for these purposes, now we are looking at $62,800. That's our income include an amount that we can normally include in our income for the year. Because you are able to and have the contribution room to contribute 50,000 of that into an RRSP, we get that deduction off of income which leaves us with $12,800 that will be subject to tax. So the first amount is at 35% we have been told is the marginal rate to use for these purposes. That will give us a tax of 4480. There is an additional tax of 20% on that 12,800 amount. My math tells me that the total of $7040 of tax will be due. >> All right. Calculations from Nicole Ewing? I'm glad it's your job to do that part and not mine. My part is to read the question. Let's get to another one here. My wife and I are seniors in our 80s and have two one-year GICs maturing in early August. We have no need for ready cash but would like some growth in our investments without too much risk. What do you suggest? We cannot give advice, investing advice on the platform. We can run down the scenario or the situation that the couple are in. >> It's really important that they have indicated that they don't need the cash right now. They have no need for it so the question would be looking at the broader financial plan, what is their cash flow, what is there income source? Really thinking through whether you're going to need that cash now or in the future. We want to be mindful of what the goal for the money is. If it's going to be utilized or needs to be available, of course, we need to guarantee that those funds are going to be there. So the no risk or low risk options might continue to be appropriate. If you don't need the cash though I would be encouraging you to think about what is the ultimate goal for those funds? Do you think that you will need them to fund the rest of your retirement? Is it may be time to start thinking about the estate plan and whether it makes sense to be advancing some of those funds? Perhaps there are charitable options that we want to be considering if we are not using those funds. Could we be reducing our overall tax liability in other ways? ways? years and we can't expect to be earning any more income on the horizon that we are not already aware of so I would be suggesting that making sure you really deal think about that risk tolerance, that ability to take on additional risk and minimizing that really is likely a priority at this stage of the planning. GICs, the rates of got up since last year so you might find yourself in a better situation in terms of your options this year but I would encourage you to look at that from that holistic perspective. What do I need the money for, what is its purpose, why am I holding it in the account that I am and what is the ultimate goal of those funds? >> Important things to consider. Here's one. People find themselves in the situation with an expensive housing market in the country. We have someone asking, is it a good idea to sell my investments to buy a house rather than borrow more money? Same caveat here, we can't give advice on the platform. We can definitely talk about this kind of scenario. Someone is trying to get into homeownership and where they are going to source the funds from. >> This is a very complex issue that requires us to step back and look at what the overall goal is. If you are looking at selling your investments to purchase a home to live in, my question would be, where are you currently living now? Are you renting? What is the cost of that, what is your overall expectation? Be mindful that if you do access those funds, if they are not in an RRSP that can be used for a home purchase or a first home savings account, but if that's not where the money is going to be going, you will likely have a tax liability on any funds that you do sell. If you are selling investments, it would be the after-tax proceeds that would be available to purchase your home. You might be able to qualify for the principal residency exemption and that might allow doses if the funds are coming out of the TFSA or RRSP, there's already that tax deferral going on there. So I tend to follow that view that home is not an investment so we need to be thinking of it as where we live and ultimately what function at serving as opposed to looking at it straightly from that tax or investment perspective. You want to crunch those numbers, with the tax liability is going to be, your overall goal for your retirement, how would it impact if you're pulling those funds out, if it's an RRSP, you lose your contribution room, if it's a TFSA, you don't, you have the opportunity to recoup it, so I be looking at what is my current scenario, what is my future expected scenario likely to be and then really weighing the pros and cons. But it's a risky move to really prioritize one goal at the expense of all others. We need to be looking at it holistically and looking out if we are using our proceeds or investments for one purpose it's going to have an impact on the other goals and needs that we may have. >> This made me think of some Canadian to view their home is the retirement plan. If this is the place that you live, perhaps it should not be thought of as an investment first. >> That's it. We have to look at, the prices of rent are going up significantly as well and so if you are, you need to be thinking about it from that broader perspective. It's not an investment but it does have obviously significant financial implications and so I know a number of people as they are going into retirement with the expectation that they will be drawing on their home in order to fund their retirement and for many people that's an effective way of doing it. But we need to look at, what is your time horizon? How long is it going to be that you are living in your home? What are the implications for other people in your life as well? How would that decision be impacting them? It's a much broader decision than simply an investment or tax decision. It is a lifestyle choice with very broad impact. >> As always, make sure you do your own research before making any investment decisions. we are going to get back to your questions for Nicole Ewing on tax and estate planning in just a moment's time. time. time. Just email moneytalklive@td.com. Now let's get to our educational segment of the day. In today's education segment, we are having a look at tedious Advanced Dashboard, platform designed for active traders available through TD Direct Investing. New Guarino, senior client education instructor with TD Direct Investing has this look at how you can find fundamental analysis tools on the platform. >> So when it comes to Advanced Dashboard, a lot of investors would think about it in terms of the active traders face. There is also something for you if you practice fundamental analysis within Advanced Dashboard. And which assure you that. Let's hop into Advanced Dashboard and take a look. Once here, investors will click on the analytics tab. It's already pre-created for you. What you want to do is type in a company you are interested in. We are going to use a company we have on screen already. Starting off, investors are able to see the company profile. A lot of fundamental analysts are concerned about the management of the company, what exactly the company does, how well is management carrying out the business. On the company profile here, investors can see some additional information such as CEO, CFO and anything else that matters to them. Now moving on, investors are able to take a look and see what analysts say about this company. On the bottom right here, you are able to see how many analysts have rated this company, we have 54 analysts that have given us a projection for this company. And right here, we see their consensus is by and the target price in the next 12 months for this company is $403.75. You are also able to see if this projection is up or down compared to the current market price. This is 20% more than the stock is currently selling for. Investors can also see things like financial statements, so things like your balance sheet, your income statement and your cash flow statement, all you need to do is just scroll down to find each one, each of the statements. Finally, for those investors who are more concerned about estimates and ratios and who may not be interested in millions of numbers when it comes to financial statements, there is something for them as well. Looking at this page that shows you the estimates and ratios, investors are actually able to see things like the earnings-per-share which is represented by this first chart here on the left-hand side and if you're interested in seeing a comparable change year-over-year, you can simply click on here and this chart actually adapts to the new number you selected. Additionally, investors can see things like price to earnings ratio, cash flow statement as well as dividends. Finally, if an investor reviews all of this and likes what they see, you are also able to place a trade directly from this tab. I'm going to click on the buy here and once you do that, you will see in order to get shot. Investors can either buy or sell from here. You can place a limit or a market order depending on the information that you have reviewed. All of this just shows investors that there is a dimension of something for everyone. If you are an active trader, there's something for you and Advanced Dashboard. If you practice on a mental analysis, there is something for you and Advanced Dashboard. >> That was Nugwa Haruna from TD Direct Investing. I just wanted to give Nugwa special thanks for all of her great education segments and appearances on the show. She is actually moving on to a different role at the bank and won't be contributing to the show. We wish her all the best for the next step of her journey. Thanks for everything, Nugwa, and good luck. [music] Okay, we are back with Nicole Ewing from TD Wealth, take your questions about tax and estate planning. Here's another one for you, Nicole. Does the superficial loss rule apply between children and parents? >> So just to level set, the superficial loss rule just means that if you are an affiliated person repurchases or buys a securities that you have sold at a loss, that loss will be denied if that repurchase happens within 30 days. Essentially, in a 60 day window, we want to be looking at if you are disposing of or re-acquiring the identical property. Any loss on the property is going to be denied. Affiliated people for this purpose mean spouses, perhaps corporations that you are controlling. If you have trusts, even RRSPs, all of those accounts are going to be caught but the question of whether applies between children and their parents, the answer is no. >> So whatever my sons get up to, I don't think they have their hands into any financial stuff, has nothing to do with me. >> None of your business, no. >> I'm happy for it to be that way. Although I don't know where they get the money from. All their money comes from me. >> So maybe it is your business. >> I should say they are 20 and 18 so they shouldn't be fully out of the nest yet. Another question from the audience. A viewer wants to know, would be possible to get your opinions on where to keep an emergency fund? The consensus is to keep it in a high interest savings account. I also heard some use a line of credit to access funds in case of an emergency. Maybe there are other options I'm not aware of. I always hear you have to have a rainy day fund. How do you go about building one? >> Exactly. An emergency fund is for that, for emergencies. This money needs to be as liquid and available as possible so that we are not in an emergency and not able to access the funds. A high interest savings account is often a choice that people make. There is a TFSA with a high interest savings account aspect to it, those are fairly common, that you would have essentially be earning your high interest within the TFSA which is again tax-deferred and you are not going to be paying tax on that. Using a line of credit or really any other form of credit as we have seen in the last few years, the interest rates can be changing, volatile and can change very quickly, and can change the expectation that we might have a better ability to pay something back. So while having emergency credit available is frankly a very common approach to have, we do need to be mindful that there are going to be interest payments and that money is going to need to be paid back if you are using debt to fund your emergencies. It is a much less risky endeavour to have those funds available either in your high interest savings account, whether that might be within a TFSA or otherwise. A TFSA can also be a useful way to be earning income but we want to be mindful of the risk of any investments that we might find ourselves in because again the key, the goal of emergency fund is to be accessible and liquidated and be able to draw on that immediately. We don't want to find ourselves invested in things that might take a number of days or perhaps weeks to get out of. We don't want to be waiting for certain deadlines. High interest savings account does serve that purpose very well. You might look at that sort of account within a TFSA and making sure that your credit is up-to-date and available and strong in case you needed is a great additional step to take. >> Okay, another question from the audience. Someone was intrigued by you talking about the alternative minimum tax scenario. Can we get an example scenario of how the AMT works? >> I can. In one instance the things that has changed is the tax option benefit is going to be taxed differently under the new alternative minimum tax rules then under the current ones. At the moment, it's an 80% inclusion rate. That will be increased to 100%. This is an exercise. Her total exercise price is 300,000. Their market value is 500,000. There we have a gain of 200,000. In this example, you will see that the tax in 2024 is going to be less than if she earns that same stock option benefit in 2023 or under the current rules and that is because of the you can see that under the scenario you have on here, the test of whether or not you need to pay AMT is whether or not the AMT column is higher than the federal tax column that you would be paying. In this case, the current rules, you would be paying 18,000 and AMT. Under the new rules, you would not be paying AMT, you would instead be paying your federal tax of 15,840. I say federal. Be mindful as well there are provincial AMT rules as well. In most provinces, that's a percentage of the federal tax owing but when these numbers, this is the federal amount I'm referring to. There are additional taxes that would be payable to the provinces. >> Important things to be mindful of. A nice illustration of it there. We will get back to your questions for Nicole Ewing on tax and estate planning in just a moment's time. As always, make sure you do your own research before making any investment decisions. and a reminder that you can't touch with us at any time. Do you have a question about investing or what's driving the markets? Our guests are eager to hear what's on your mind, so send us your questions. There are two ways you can get in touch with us. You can send us an email anytime at moneytalklive@td.com or you can use the question box right below the screen here on WebBroker. Just write in your question and hit send. We'll see if one of our guests can get you the answer right here at MoneyTalk Live. Arguably, the main market event of the week is going to be the US Federal Reserve with an interest rate decision coming on Wednesday. The market pricing and a hold from the Fed. Spending came in hotter than expected in the first quarter, which quarter? Third quarter. There are a lot of things to go through here. We are going to look at TD Economics take on what's going on there. >> Market pricing is expecting a hold and the benchmark interest rate. Not since March of last year the Fed has hiked rates at its fastest pace in four decades to tackle soaring inflation, leaving rates at a 22 year high. We've talked about the higher treasury yields. Higher yields can also tighten financial conditions. Lastly, the 10 year treasury jumped above 5%. It is trading just below that this morning. Despite these financial conditions tightening, we got a blockbuster reading in US GDP in the third quarter. It showed economic activity accelerating out more than double the rate of expansion seen in the previous quarter. Consumer spending was surprising as well, to jumped 4%. Resilient, that will spell trouble on the inflation front. They point to several headwinds that could challenge that notion. One is the ongoing United Auto Workers strike, the resumption of student loan repayments as well as a potential government shutdown coming in November. These could act as a bit of difficulty for the US economy as well. TD expects economic growth to slow to 1% in the first quarter to stalling through the first half of next year. On the inflation front, TD Economics says that core PCE inflation in September is signalling some evidence of progress stalling. The price growth picks up last month with notable strength in Powell's super core measure of inflation which has barely budged from last year's high as you can see from the chart. TD Economics does note that on an annual basis, core inflation did decelerate in September and that should cool further in the coming months according to TD Economics. >> When Wednesday comes, if we get the Fed holding on that rate, there are going to be some market participants giving a big sigh of relief. But then, you have to worry about the December meeting. What is the thinking around that? >> The December meeting is coming up right after that. Marcus will be pricing in a 20% chance of a hike in December. This week, we will get some key economic data. One is the employment cost Index for the third quarter in the US and that is important because it contains a measure of wage inflation that the Fed watches closely. They are looking for a cooling and wage inflation which is as a sign that inflation is slowly ramping down. We also get the US payroll report for October this Friday. That's a big one. Unless this report shows some definite signs of cooling the job market which looks unlikely according to TD Economics given the recent rise in some of the other indicators, TD Economics believes another rate hike come December seems inevitable. >> Interesting stuff. Wednesday is a big day. Thanks for that. >> My pleasure. >> MoneyTalk's Anthony Okolie. No for an update on the markets. We are back into Advanced Dashboard, looking at the heat malfunction here. Gives you a view of the market movers. We will start looking at the TSX 60 by price and volume. It's hard not to notice what's going on near the bottom of the screen in the materials bucket. That is First Quantum. You had Panama indicating yesterday they are going to put the future of that big copper mind that the first quantum has a contract with the government there, there's going to be a referendum. You got First Quantum down a little more than 29% but you still have a topline number on the TSX Composite Index that is starting the week modestly in positive territory. Looks like it's the banks doing the heavy lifting today. Most of the big banks right now up to the tune of 8% or even 1 1/2%. It then you have Manulife, an insurer, up about 1.7%. Adding some points to the trade. South of the border, investors will be awaiting that Fed rate decision. Anthony just gave us a nice breakdown of what's coming on Wednesday. Ahead of that, you have some interesting moves in the market. It's been a tough couple of weeks for lunch the big names. Right now there's a bit of a rally. In the technology space, you see names like Google up to the tune of almost 2%, Meta, the parent company of Facebook, a little more than 2% to the upside. Some downdraft for Tesla today as there have been concerns of late not only about Tesla but some automakers that the demand for EVs right now isn't as strong as perhaps they thought it would be at this point. You can get more information on TD Advanced Dashboard by visiting TD.com/Advanced Dashboard. We are back now with Nicole Ewing from TD Wealth, taking your questions about estate and tax planning. Here's another one. With inflation so high, do you expect TFSA investing limits to be raised soon? Here's an intriguing one. >> Ideal. I do expect them to be raised soon. I expect them to be raised in 2024. This will be the first time that we've had an increase in two consecutive years since the TFSA was introduced. So we will be going based on the math that we know now, numbers were released fairly recently on the Consumer Price Index and the calculation is done so you can determine the factor that will be applying to you the TFSA amount. If it's originally $5000 and then adjust for inflation and $500 increments, based on the numbers that have been released, we will be looking at an increase up to $7000 in 2024 which would bring the cumulative total for those who have been able to invest since the very beginning to $95,000 within a TFSA. Pretty significant numbers were getting up to. >> For someone who has never availed themselves of a TFSA, important to remind them that that contribution room has been growing for them when they do perhaps decide to open a TFSA. >> Precisely. Unlike other sorts of accounts that may require you to have the account open, you are entitled to the room simply by being a Canadian resident person who is over the age of 18 and meets the requirements. So each year, your room accumulates. If you're not able to use it, it comes onto the, carries on to the next year. If you do take any money out, if you have withdrawn funds from your TFSA, then on January 1, you will have the contribution room regenerated so you will be entitled to re-contribute any amounts that you pulled out as well as have additional contribution room that would become available in the year. So for some folks that could really make an impact into being able to shelter those funds in a tax-free environment where they can grow significantly, particularly if you are able to put in your $95,000, you won't be getting a deduction for that but those funds will be able to grow tax-free really and definitely at your leisure so if you don't yet have a TFSA, I know many people sort of didn't really consider it imperative to have one in the early days, at this .95 thousand going into next year is a pretty significant amount and we really do need to be looking at the TFSA to see how it can be utilized most effectively. >> Okay, one more question we are getting here. I'm not surprised. People have this on their mind considering the challenges for some equities this year. What should we keep in mind for tax-loss selling season? >> We mentioned a few minutes ago about the superficial loss rules. That's a big one that people get tripped up. We want to be coordinating with our spouse. If you're going into the year and doing some tax-loss selling, be aware that your spouse, their activities within their accounts and you in any of your other accounts are going to be looked at together to determine whether that loss will be denied. As well, one change will be different in future years. Because the alternative minimum tax rules are changing and one significant piece of that is that the capital loss carry forward for the purpose of an AMT calculation is going to be reduced to 50% so you're only able to carry over 50% of those net capital losses into future years for the purpose of the AMT calculation. So if that's part of your strategy, make sure you are aware of what the impact might be. Make sure you are going to have enough income in future years to be able to get back some of the alternative minimum tax that you have paid and that this capital loss carry forward isn't going to get somehow stuck and lost for you and that you're not going to be able to utilize it. So being aware of the new rules, how they impact the changes, being aware of your whole family situation and make sure you are coordinating any of those year-end tax planning strategies would be my recommendation. >> Before I let you go, we thank you for joining us as always. We got a thanks from an audience member. Jeff wrote in, thanks very much for Ms. Ewing answering my question on it collapsing and RESP. Be sure to thank her for that. Jeff, we will indeed. Thanks for sending the question. >> My pleasure. >> It's always great having you. I look forward to the next time. >> Me too. Thanks Greg. >> Our thanks to Nicole Ewing, director of tax and estate planning at TD Wealth. Always be sure to do your own research before you make investment decisions. Entourage show, Colin Lynch will join us, managing Dir. and head of global real estate investment trust TD Asset Management. He wants to take your questions about real estate. Very interesting time for the space. I know you have lots of questions for Colin. Get a head start. Email moneytalklive@td.com. That's all the time we have for the show today. Thanks for watching. We will see you tomorrow. [music]