23 October 2009 External T.I. 2009-0309861E5 F - Tax-free Savings Accounts -- summary under Paragraph 74.5(12)(c)

Mr. X makes the only contribution to the TFSA of his wife. After the resulting qualified investment has appreciated, she withdraws all (or a portion) of the amount in the TFSA and invests such proceeds in an income-producing property. CRA stated that the “exception in paragraph 74.5(12)(c) is not applicable” in this scenario but that “It appears to us that subsection 74.1(1) could apply.”