Line 221 - Carrying charges and interest expenses

You can claim the following carrying charges and interest you paid to earn income from investments:

• fees to manage or take care of your investments (other than administration fees you paid for your registered retirement savings plan or registered retirement income fund) including safety deposit box charges;
• fees for certain investment advice (see Interpretation Bulletin IT-238, Fees Paid to Investment Counsel) or for recording investment income;
• fees to have someone complete your return, but only if you have income from a business or property, accounting is a usual part of the operations of your business or property, and you did not use the amounts claimed to reduce the business or property income you reported (see Interpretation Bulletin IT-99, Legal and Accounting Fees); and
• most interest you pay on money you borrow, but generally only as long as you are using it to try to earn investment income, including interest and dividends. However, if the only earnings your investment can produce are capital gains, you cannot claim the interest you paid. For details, contact us.

You cannot deduct on line 221 any brokerage fees or commissions you paid when you bought or sold securities. Instead, you use these costs when you calculate your capital gain or capital loss. For more information, get the guide called Capital Gains. You also cannot deduct the interest portion of student loan repayments. However, you may be able to claim a credit on line 319 for this amount.

Note
You cannot deduct the interest you paid on money you borrowed to contribute to a registered retirement savings plan or a registered education savings plan.

Canada Savings Bonds (CSBs) - When you buy bonds through payroll deductions, you may pay an interest charge. You can claim this amount on line 221.

Example
Michael bought a $1,000 CSB through payroll deductions. The total amount deducted from his pay for the bond was $1,017.94 (the $1,000 face value of the bond plus $17.94 he paid in interest). Michael can claim the $17.94 on line 221.

Policy loan interest - To claim interest you paid during 1999 on a policy loan made to earn income, have your insurer complete Form T2210, Verification of Policy Loan Interest by the Insurer, on or before April 30, 2000.

Refund interest - If we paid you interest on an income tax refund, you have to report the interest in the year you receive it, as explained at line 121 in this guide. If we then reassessed your return and you repaid some of the refund interest in 1999, you can deduct the amount you repaid.

Carrying charges for foreign income - If you have carrying charges for Canadian and foreign investment income, identify them separately on Schedule 4, according to the percentage that applies to each investment.

Receipts - To make your claim, complete Part IV of Schedule 4. Do not include your receipts or Form T2210 with your paper return. If you are using EFILE (see page 7) show them to your EFILE service provider. In either case, keep them in case we ask to see them.

If you have a tax shelter, see "Tax shelters" on page 12.