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Originally Posted by NoName
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.
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Yes TFSA as tax sheltered entity is better. if you have an ETF that actually BUY bitcoina and the price correlate with bitcoin then that would be the smarter choice. I am writing from the point of view of you not having an ETF that tracks bitcoin. Hope that clear. For example , in US only one i can think of is GBTC fund. But they only own like 3% or some rediculous low amount in bitcoin in their coin holdings. We yet to have an approved ETF tracking bitcoin or an overall crypto.
Hence my point that I would rather take a tax hit (also eliminate a limit) than not invest at all. I don't know what your limit is but let's say someone wants to buy 1 whole bitcoin - that's 40K - and if your TFSA fund limit hasn't reached that in my understanding that u are limited ...
Also ETF funds usually lag behind a technology. U would miss buying BTC from 2009 (more knowledagble mainstream 2013 - i mentioned it here in 2013 so it was mainstream/atleast those who follow market) if you wait to buy things in your protected portfolio. Hope thats clear.
I am not advocating buying outside of your TFSA if you don't have to but that shouldn't be your rate limiting factor.