I am no tax expert either, and just going by what I was told with an in-kind transfer into an RRSP, so I assumed the same for TFSA. What I was told with the RRSP, was that you have to pay capital gains, but do not get to use capital losses. Which does not seem right, but is what I was told.
I guess it is best to leave this up to the experts.
Cheers,