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Originally Posted by iDumb
But that's my question. Why do you have to buy it in TFSA. Why not buy directly via the exchange - like someone would buy in a taxable account? You just pay the tax on gain. What's wrong with that? I rather pay the tax and have direct access to crypto. what am I missing?
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Not sure how I can describe the advantages any better than just simply saying no taxes? I don't really care for the direct access to crypto as much as I care for saving on taxes. I
For example if I invest 20k directly into buying bitcoin and sell it down the road for 40k, that is about 20k in capital gains. In Canada up to 50% of capital gains is taxed so 10k of that 20k profit will be subjected to tax (added to my income). Now under the opposite scenario if this was a bitcoin ETF under a tax sheltered account, I would keep my entire 20k profit (excluding the premium/fee). So iDumb, is there any disadvantage in me choosing to invest through the TFSA? I guess I'm just trying to understand why having the direct access matters so much (going to have to forgive me here as I don't know much about the intricacies of 'owning' bitcoin).
Also from what I understand, TFSA is much better than the Roth IRA. Canadians can carry over their contribution rooms, if unused, to following year. If a kid from the age of 18 has no idea of what investing is and never used his TFSA til the age of 30, his contribution room would be the accumulation of the years from 18-30, this doesn't exist in a Roth IRA. Another thing is with a TFSA we can withdraw funds anytime where as there are some limitations with the Roth IRA. Also, withdrawals are added to my contribution room for the next year (on top of the regular contribution room for the new year!) I hope this gives more context to what the TFSA is.