CRA confirms that the interest deduction followed s. 75(2) attributed income

CRA has confirmed that where an individual borrows money to acquire an income-producing property and then settles the property on an inter vivos trust to which s. 75(2) applies to attribute the property income to him or her, the individual generally will still be entitled to an interest deduction.

Neal Armstrong.  Summary of June 2012 STEP Roundtable, Q. 13 2012-0449811C6 under s. 20(1)(c).