It will almost certainly be a mistake to *not* transfer your maximum $5,000 allowance out of your Cash Account, "In Kind", and into your TFSA -- even if you don't have the cash to pay the Capital Gains next year.

Here is why.

Lets say you purchased your SLI shares at $1.00, and you transfer 2,500 of them "In Kind" into your TFSA at $2.00. This will be a "deemed disposition", with a capital gain of $2,500 ($1.00 per share gain). So, in Alberta, you'd owe ~20% capital gains tax, or $500 tax, around this time next year.

Lets say that we have little news over the next year, and the stock price stays at $2.00. You are forced to sell some of your shares to cover the bill, and you sell 250 shares from your TFSA account to pay your capital gains tax bill. You now have only 2,250 shares left in your TFSA.

So, the only way you won't win, is if those 2,250 shares now in your TFSA *never* result in a tax savings >= $500.

If the 2,500 shares in your Cash account grow in value to $5.00/share and you sell them, you have a $10,000 capital gain ($12,500 - $2,500 original price), and you owe about $2000 in tax, netting you $8,000 after tax.

If the 2,250 shares left in your TFSA grow in value to $5.00/share and you sell them, you have a $8,650 profit ($11,125 - $2,500 original price), tax free.

No big deal. But, say the Ultimate happens, and SLI grows to $500 a share. Now, you have a 2,500 * $500 == $1,250,000 capital gain in your Cash account, and you owe $250,000 in tax, leaving you with a $1,000,000 net profit. The 2,250 shares in your TFSA will yeild $1,125,000 tax free. That's a net $125,000 extra, after tax -- even if you have to sell 10% of your TFSA holdings next year to pay your Capital Gains taxes!!

Basically, if you get away selling anything less than 20% of the shares in your TFSA to cover your (next year's) Capital Gains bill, you'll always be ahead!