The final months of the year contain some important deadlines for mutual fund investors. Here are some things to consider: Tax-loss selling. You have until late December to sell a fund (or any security) that settles in 2018 – December 15 is the expected last buy or sell date for Canadian securities to settle in calendar year 2018, based on trade date plus two business days.
However, it is recommended to review your non-registered mutual fund portfolio earlier to consider the sale of an investment with accrued losses before the end of the year to offset capital gains realized in the year, or in the three previous taxation years if net capital loss was created in the current year.
RRSP conversion. If you turned or are turning 71 this year, December 27 is the deadline for collapsing your Registered Retirement Savings Plan (RRSP). However, planning for this important financial change should be done well in advance of the December deadline. While many of your mutual funds may continue to serve you well after the conversion, a portfolio review is a good idea.
TFSA withdrawal. Strictly speaking this is not a deadline, but if you’re planning a withdrawal from your Tax-Free Savings Account (TFSA), consider making the withdrawal by December 31 instead of waiting until the new year. That way, the amount withdrawn in 2018 will be added back to your available TFSA contribution room on January 1, 2019. Keep in mind, as mentioned above, that if you are selling fund units, you will need to allow time for the trade to settle.
Let’s talk about any changes you need to make to your mutual fund portfolio and your finances before year end.
Larry Kleinmintz, R.H.U., T.O.T., M.D.R.T.
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