Hey RT65, i have done much research and asked many questions. I have seen that Scotia is opening accounts in anticipation of Jan 02.

The big thing about this is that RRSP season starts Jan 02 and a lot of banks want you to be thinking of Mutual Funds instead of stocks.

You can put any of these investment vehicles in your account. I have inquired of RBC, who i deal with, and my advisor, who is arms length most of the time, was excited about this account too, but did not know enough yet. The bank was to start rolling out the training for this account soon.

Basically you will be able to open an account that must be registered just like an RRSP account. When you purchase a security, it will automatically be retained inside your account. Think of it as a 'savings' account. When you deposit money, you have a balance. In the TFSA, you deposit a security, and you have a balance.

In this case, you can have a maximum of 5,000 in it for the first year. If you choose to make a withdrawal, i.e. sell your security take the proceeds out of the account, that money can not be reinvested in the same calendar year.

An example of this is if you bought 5,000 shares of company X for 1.00 each share, your account would be full. If you cash out 3,000 shares at 2.00, the proceeds would be 6,000. The actual amount that you would have withdrawn would only be 3,000 which was the original value of the investment. The 3,000 profit would be tax free. No capital gains.

When jan 02 0f 2010 rolls around, you would get 5,000 more room in your account bringing the total to 10,000. You would then be able to invest 8,000 into the account because you still had 2,000 original dollars in the account.

As far as the homerun scenario goes, if that investment went from 1.00 to 10.00, you would have made 50,000. And that would be tax free baby.

Or better yet, my hopes and dreams scenario, if I bought WEL at .03 for 150,000 shares or 4,500 bucks, and that baby popped in the next 2 years to 1.50 per share, well then the math says that I could pocket 220,500 bucks tax free.

May not happen in 2 years but 5 years is worth the wait I would think.

P.S. - You may not have any capital gains to pay, but if the investment went south, you wouldn't get to write off any of the losses either.

The nature of the beast.

Andy K