Making that RRSP contribution before the deadline



Shaun Sun

Financial Advisor & Portfolio Manager


So, you haven’t fully ‘topped-up’ your RRSP?  There’s still time to make a contribution and have it count towards reducing your taxable income earned in 2015, if you do so before February 29th.  Here are some things to consider before the deadline:

I want to make an RRSP contribution, but I do not have cash. Can I still do this if I have non-registered investments with Rogers Group Financial?

Yes, you can make an ‘in-kind’ contribution of shares or units of a qualified investment, which includes publicly-traded Canadian stocks, bonds or mutual funds, from your non-registered account into your RRSP.  Making contributions in this manner will trigger a ‘deemed disposition’, meaning for tax purposes you are considered to have sold the investment when the contribution is made.  The proceeds of the disposition are equal to the fair market value of the investment at the time of the contribution and any taxable capital gain arising on the disposition is included in your income.  It is important to note that if the investment has a capital loss than it is better to sell the investment and transfer the proceeds as any loss incurred on a transfer “in-kind” is not recognized.

If I make an RRSP contribution now, do I have to use the deduction against taxable income earned in 2015?

No, for contributions made before February 29th, you or your accountant can choose to use part or all of the deduction to reduce your taxable income in 2015.  You can also choose to use the deduction in 2016 or in a future year.  Deferring the use of some or all of the tax deduction may make sense if you expect your taxable income to increase this year or in future years.  By deferring the deduction to a year when your marginal tax rate is higher, you can increase your overall tax savings.

If you would like to know more about making an RRSP contribution before the deadline, do not hesitate to talk to your Rogers Group Financial advisor or your advisory team.

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