ARCHIVED - Line 221 - Carrying charges and interest expenses

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You may be able to claim carrying charges and interest you paid to earn income from investments. To make your claim, complete Part IV of Schedule 4.

Carrying charges

Carrying charges include:

• fees for the management or safe custody of investments;
• safety deposit box charges;
• accounting fees for recording investment income;
• investment counsel fees (see Interpretation Bulletin IT-238, Fees Paid to Investment Counsel); and
• administration fees charged for your self-directed RRSP if you had to pay them to the trustee of your RRSP. For more information, get the income tax guide called RRSP and Other Registered Plans for Retirement.

You cannot deduct on line 221 any brokerage fees and commissions you had to pay because you sold securities. These expenses are considered "outlays and expenses" on Schedule 3 when you calculate your capital gain or capital loss.

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.

Interest expenses

You can usually deduct the interest paid on money you borrowed to earn investment income. Generally, if you no longer use the borrowed money to earn income, you can no longer deduct the interest you paid on that money. However, if you no longer use the borrowed money to earn investment income in 1995, and all or a portion of the borrowed money has been lost due to a decline in the value of the property, you may be able to deduct all or a part of the interest you paid on that money. For details, contact us.

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

Example

Michael bought $1,000 of Series 49 CSBs through payroll deductions. The total amount deducted from his pay for the bond was $1,025.64 ($1,000 face value of the bond plus $25.64 in interest). Michael can claim the $25.64 he paid on line 221.

Policy loan interest - To claim interest you paid during 1995 on a policy loan made to earn interest, have your insurer complete Form T2210, Verification of Policy Loan Interest by the Insurer, before May 1, 1996. Keep the completed form in case we ask to see it.

Date modified:

2002-02-04