Here, a reader wants to recontribute money on stock losses within a Tax-Free Savings Account.

Q – My question is about Tax Free Savings Accounts and selling a stock at a loss. Suppose I purchase shares in a company for a total of $5,000. I then sell the stock for $2,500 for a loss of $2,500. But I don’t take the money out of the TFSA. Can I contribute $2,500 right away back into my TFSA? Or do I have to wait till the following year and my limit will be increased by $2,500 due to the loss? – Randy W.

A – Sorry to be the bearer of bad news but losses on securities within a Tax-Free Savings Account are not recoverable and do not add to your contribution limit. If you had withdrawn the $5,000 directly and then bought the stock, you would have been able to recontribute the $5,000 in the following year. But under the scenario you describe, that $2,500 loss is simply gone. – G.P.

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