You have recommended a portfolio of segregated funds to your client Sandra Burke. She has asked for some clarification on how the earnings on segregated funds are taxed. Which of the following statements is NOT correct?

Select one:

$$ In a TFSA, all allocations of income and any increases in the unit value are not subject to tax

$$ When segregated fund units of a non$-$registered account are redeemed, a capital gain or loss will be incurred

$$ Taxation is based on whether the account is held as a RRSP$,$ TFSA or non$-$registered plan

$$ In a non$-$registered account, all investment income is passed through to the investor annually and taxed as capital gain