TFSA Contribution Rules: Do Dividends Count?
Question:
Do dividends count as contributions to a Tax-Free Savings Account (TFSA)?
A) Yes, they are counted as contributions.
B) No, dividends are not considered contributions.
C) Only dividends from foreign investments count as contributions.
D) Dividends count as contributions only if reinvested in the TFSA.
Answer:
B) No, dividends are not considered contributions.
Explanation: In a Tax-Free Savings Account (TFSA), dividends received from investments held within the TFSA are not considered contributions. They are simply income generated from the investments and do not affect the contribution limit. Only the amount you deposit into the TFSA counts towards your contribution limit.
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