Which statement best describes the tax treatment of TFSA withdrawals?

Which statement best describes the tax treatment of TFSA withdrawals?

• A. Withdrawals are fully taxable as income.
• B. Withdrawals are only tax-free if the account has not held investments.
• C. Withdrawals are taxed at capital gains rates.
• D. Withdrawals are tax-free and do not affect other income.

Answer: (D)