Q. I would like to contribute to my Registered Retirement Savings Plan (RRSP) for 2009. I do not have sufficient funds on hand to maximize my contribu­tion. However, I have shares that are not reg­istered. Can I transfer the shares to my RRSP? Because of the market downturn the shares have lost their value. Can I deduct the losses this year? — Alan

A. In order to qualify for some tax deductions, what you do before Dec. 31 can determine if you get a tax refund or pay more to the federal government.

Investors should take stock of their investments, particularly in these vola­tile times. It is a good time to rebalance your portfolio and get rid of “darlings” of the past and look at the future.

Generally, sale of non-registered shares at a loss can be used to reduce capital gains in the year — effectively reducing your tax liability. Additionally, losses can be carried back three years to recover prior year taxes on gains.

There are stop-loss rules that may deny losses on some dispositions. An asset transfer from a non-registered account to an RRSP (registered account) can be executed by your broker and shares kept intact. However, stop-loss rules may apply and the loss for tax purposes may be denied under the circumstance. This is consistent with the sale of shares at a loss and repurchased within 30 days.

Before transferring or selling shares, consult your broker/accountant concerning these types of transactions.

– Henry Choo Chong, CGA, can be reached at choochonghcga@yahoo.ca and 416-485-5225.

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