Cottenmouth - I don't think it is that simple. On top of the 1% penalty, you are supposed to correct the over-contribution right away and convince them it was an accident. I think the accident idea would be a tough sell in this case. Correcting it would mean deregistering the over-contribution and dealing with any tax implications. If by chance the shares had collapsed before this was done, one would have to deregister a lot more to equal the same dollar value. If not all corrected to their satisfaction and quickly enough, an assessment could be triggered. If the share value had soared, that might affect the tax avoidance within the TFSA. They are always looking for ways to stop things like this just they do with the superficial tax loss.