Interest expense

In the calculation of you motor vehicle expenses, you can deduct the interest on money you borrowed to buy a motor vehicle or passenger vehicle that you use to earn rental income.

However, there is a limit on the amount of interest you can deduct when you use a passenger vehicle to earn rental income. The amount of interest you can deduct is limited to the lesser of the following two amounts:

• Total interest payable for the year; and
• $10 × the number of days for which interest was payable in the year (use $8.33 for passenger vehicles bought between December 31, 1996, and January 1, 2001).

Forms and publications

• Guide T4002, Business and Professional Income
• Guide T4036, Rental Income
• Form T2125, Statement of Business or Professional Activities
• Form T776, Statement of Real Estate Rentals

Related topics

• Type of vehicle you own or lease

Date modified:

2016-01-05