Over contributed to stock-based TFSA, what happens?

Hello all, so I misread my tax statement and thought that was my contribution room for the year from that pt forward, and not from the beginning of 2010. So I over contributed a little bit (under 1K, not a huge amount).

I know that the amount you over contribute is taxed for x number of months remaining in the year. Because I moved it into my TD waterhouse TFSA, and bought stocks with the money, I was just wondering how they calculated the tax I owe. Do they merely tax the amount you over-contributed, or do they tax gains also?

TIA

They only tax the amount of the over-contribution. If you move the over contributed money out of the TFSA now you will only be taxed 1% of the amount over the limit (if it were $1000 over, then we're talking $10).

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Any gains directly as a result of the over contribution are removed because it becomes 100% taxable.  if such amount if withdrawn it is not added back into the contribution room next year.