Line 121 - Interest and other investment income

Include on this line your interest from Canadian sources, such as amounts shown in box 13 of your T5 slips, and box 26 of your T5013 slips. If you received foreign interest and dividend income, such as an amount shown in box 27 of your T5013 slips, report it on this line. See "How do you report foreign income and other amounts?" on page 11. Also include the interest on any tax refund you received in 1999, which is shown on your Notice of Assessment or Notice of Reassessment.

Report the amounts you actually received, as well as amounts that were credited to you in the year. The interest you report depends on the type of investment and when you made it.

Notes
Special rules apply for income from most property (including money) one family member lends or transfers to another. See "Loans and transfers of property" on page 12 for more information.

Generally, when you invest your money in your child's name, you have to report the income from those investments. However, if you deposited Canada Child Tax Benefit payments into a bank account or trust in your child's name, the interest earned on those payments is your child's income.

How to report

Use Part II of Schedule 4 to list your investments, and attach copies of any information slips. Generally, you report your share of interest from a joint investment based on how much you contributed to it.

Example
Karen and Pavel received a T5 slip from their joint bank account showing the $400 interest they earned in 1999. Karen had deposited $4,000 and Pavel had deposited $1,000 into the account.

Karen reports $320 interest, calculated as follows:

$4,000 (her share) × $400 (total interest) = $320
$5,000 (total)

Pavel reports $80 interest, calculated as follows:

$1,000 (his share) × $400 (total interest) = $80
$5,000 (total)

Bank accounts

Report interest paid or credited to you in 1999, even if you did not receive an information slip. You may not receive a T5 slip for amounts under $50.

Term deposits, guaranteed investment certificates (GICs), and other similar investments

On these investments, interest builds up over a period of time, usually longer than one year. Generally, you do not receive the interest until the investment matures, or you cash it in. For more information on Canada Savings Bonds, see "Canada Savings Bonds" on this page.

The amount of income you report is based on the interest you earned during each complete investment year. For example, if you made a long-term investment on July 1, 1998, report on your 1999 return the interest that accumulated to the end of June 1999, even if you do not receive a T5 slip. Report the interest from July 1999 to June 2000 on your 2000 return.

Note
Your investment agreement may specify a different interest rate each year. If so, report the amount on your T5 slip, even if it is different from what the agreement specifies, or what you received. The issuer of your investment can tell you how this amount was calculated.

For most investments you made in 1990 or later, you have to report the interest each year, as you earn it. For information about reporting methods for investments (including CSBs) made in 1989 or earlier, call our T.I.P.S. (Info-Tax) service. See the T.I.P.S. information on the back cover.

Canada Savings Bonds

Interest on a regular interest ("R") bond is paid annually until the bond matures, or you cash it in. Interest on a compound interest ("C") bond is not paid until you cash it in.

How to report

"C" bonds, Series 45 and subsequent, and all "R" bonds - Report the amount shown on the T5 slip.

"C" bonds, Series 44 (1989) - Report $7.91 for every $100 of these bonds for which you are already using the annual accrual method or for which you want to change to the annual accrual method.

If you already use the cash or receivable method for these bonds, and you want to continue reporting them using that method, you have to report the interest at least every three years. For each $100 of bonds for which you are using this method, you should have reported $32.05 on your 1992 return, $24.48 on your 1995 return, and $29.49 on your 1998 return. You do not have to report any amount for 1999.

If you cashed Series 44 "C" bonds in 1999, report the amount shown on the T600 slip minus any part of that amount that you reported in previous years. Whether you used the annual accrual, cash, or receivable method, you should have reported a total of $86.02 in previous years for each $100 of bonds.

Tax Tip
If you bought bonds through your payroll savings plan, you can deduct any interest charges you paid to buy the bonds. See line 221 for details.

Treasury bills (T-Bills)

If you disposed of a T-Bill at maturity in 1999, you have to report as interest the difference between the price you paid and the proceeds of disposition shown on your T5008 slip, or account statement.

If you disposed of a T-Bill before maturity in 1999, you may also have to report a capital gain or loss. For details, get the guide called Capital Gains.

Earnings on life insurance policies

Report the earnings that have accumulated on certain life insurance policies in the same way as you do for other investments. In all cases, your insurance company will send you a T5 slip. For policies bought before 1990, you can choose to report accumulated earnings annually by telling your insurer in writing that you choose to do so.