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 IT238, Fees Paid to Investment Counsel) or for recording certain 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 IT99, Legal and Accounting Fees);
• most interest you pay on money you borrow for investment purposes, but generally only as long as you use 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 more information, contact us; and
• interest you paid during 2009 on a policy loan made to earn income. To make this claim, have your insurer complete Form T2210, Verification of Policy Loan Interest by the Insurer, on or before the date your return is due.

Note You have to report the interest we paid you on an income tax refund in the year you receive it (line 121). If we then reassessed your return and you repaid any of the refund interest in 2009, you can deduct the amount of interest you repaid, up to the amount you had included in your income.

You cannot deduct on line 221 any of the following amounts:

• the interest you paid on money you borrowed to contribute to a registered retirement savings plan, a registered education savings plan, a registered disability savings plan, or a Tax-Free Savings Account (TFSA);
• the interest part of your student loan repayments (although you may be able to claim a credit on line 319 on Schedule 1 for this amount);
• subscription fees paid for financial newspapers, magazines, or newsletters; and
• 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, see Capital Gains.

If you have a tax shelter, see Tax shelters.

Completing your tax return

Enter the total interest expenses and carrying charges on line 221.

Receipts - If you are filing a paper return, do not include your receipts or Form T2210, but keep them in case we ask to see them. If you are filing electronically keep all of your documents.

Forms and publications

• General Income Tax and Benefit Package - Guide, return and schedules
• Guide T4037, Capital Gains
• Form T2210, Verification of Policy Loan Interest by the Insurer
• IT99R5, Legal and Accounting Fees
• IT238R2, Fees Paid to Investment Counsel

Related topics

• Line 121 - Interest and other investment income
• Line 127 - Taxable capital gains
• Line 319 - Interest paid on your student loans

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