Bradley Jacoby Games Chartered Professional Accountants | Victoria, BC | 250-370-2191

Interest Deductibility: Returns of Capital

In an April 20, 2018 Tax Court of Canada case, at issue was whether the taxpayer could deduct interest incurred in 2013, 2014, and 2015 related to $300,000 borrowed in 2007 to purchase mutual funds. From 2007–2015, the taxpayer received a return of capital* from the funds, totalling $196,850 over the period. The taxpayer used some proceeds to reduce the loan principal, but the majority was used for personal purposes. Taxpayer loses The Court examined…

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