In 2009, Glenn is allowed to contribute $5,000 to a TFSA.He contributes $2,000 for that year.If he withdraws $1,000 the same year from the TFSA account, the following year:

Question

Quizplus · Accepted Answer

When Glenn withdrew $1,000 from his TFSA in 2009, this amount is added back to his contribution room for the following year. Therefore, for 2010, Glenn would have his original contribution room of $5,000, plus the $1,000 he withdrew in 2009, plus the annual indexed increase to the TFSA contribution limit, which was $5,000 in 2010. This results in a total contribution room of $11,000, and therefore, the answer is D, which states that $4,000 contribution room is added to the 2010 TFSA limit.

In 2009, Glenn Is Allowed to Contribute $5,000 to a TFSA.He