Jasmine just celebrated her 19 th birthday on July 5, 2021. Her grandmother gave her $10,000 as
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- Jasmine just celebrated her 19th birthday on July 5, 2021. Her grandmother gave her $10,000 as a special gift for this milestone. Jasmine wanted to put it into her savings account at her bank where she already had $5,000 saved from her previous years’ birthday money. Her boyfriend Roy suggested that she put it in a Tax-Free Savings Account (TFSA). She is however not familiar in how a TFSA works but trusts Roy and put the entire amount of $15,000 into her newly opened TFSA account. Note that Jasmine has never worked either full-time or part-time as she had difficulty finding work during COVID-19. Which of the following statements is correct?
Jasmine will have overcontributed $3,000 to her TFSA and will have a penalty to pay.
- Jasmine is only allowed to put $6,000 into her TFSA, she can put the remaining money into her Registered Retirement Savings Account (RRSP).
- Jasmine is allowed to put the entire amount of $15,000 into her TFSA which is a wise decision as neither the earnings inside her TFSA nor her withdrawals will be taxed.
- Jasmine would have been better off putting the money insider her Registered Retirement Savings Account (RRSP) instead of her TFSA.
- Jasmine is not able to contribute to her TFSA as she has never worked.
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