Question

Mary has $23,000 in her TFSA after she withdrew $89,000 a month ago for the down payment on her condo. She has $12,000 unused TFSA room. If new TFSA room in January is $6,000, how much is she allowed to contribute to her TFSA next January without penalties?

Answer 1

Mary is allowed to contribute up to $107,000 to her TFSA next January without penalties, which includes her unused contribution room of $12,000, new contribution room of $6,000 for January, and the $89,000 she withdrew previously.

Step-by-step explanation:

The question asks how much Mary is allowed to contribute to her TFSA next January without penalties. Mary withdrew $89,000 from her TFSA and currently has $23,000 in it, with an additional unused TFSA contribution room of $12,000. Considering the standard annual increase in TFSA room which is $6,000 for next January, we can calculate her allowable contribution as follows:

• Unused contribution room: $12,000
• New contribution room for next January: $6,000
• Withdrawn amount that can be recontributed: $89,000
• Total contribution room for next January: Unused room + New room + Withdrawn amount
• Total = $12,000 + $6,000 + $89,000 = $107,000

Mary can contribute up to $107,000 to her TFSA in January without incurring any penalties.