In our earlier article, we discussed the deductibility of interest expenses incurred on money borrowed for investment purposes (be it for investment in real estate, or to purchase securities). However, there are other various expenses incurred when dealing with securities which may qualify for tax deduction by the Canada Revenue Agency (CRA). Thus being informed about these expenses could help you keep proper records in case the CRA required validation of any investment expenses claimed.
That being said, it is always advisable to consult your personal tax practitioner for tax advice and measures based on your unique tax situation.
Investment expenses are tax deductible if they help generate additional income. Some of these deductible expenses are investment management/administration fees, purchase/sell counselling fees, and/or tax return preparation fees; provided it is paid to an individual whose business is to advise people on buying/selling securities, managing and administrating shares, or preparing the taxpayers’ tax return.
Additionally, such expenses qualify only if they have not already been reduced from the business/property to derive the net income (there should be income from the property).
Expenses that do not qualify for tax deduction are:
• General financial counselling/planning fee
• Safety deposit box charge
• Administration fee paid for registered accounts, such as: RRSP, RESP
• Any loan taken to contribute into a savings plan (TFSA, RRSP, RESP, etc.), purchase an insurance policy, or any interest expense incurred on the loan. (Please note situation may vary if there is any transfer of money from non-registered to registered accounts)
• Brokerage fees or commissions paid when buying or selling securities.
• Any newspaper or investment magazine subscription fees paid
AG Tax LLP Can Help
If you have any tax-related queries or need assistance with tax planning or filing please contact AG Tax. Our tax professionals are highly-experienced with U.S. and Canadian tax laws and can provide you with the right guidance to handle your unique tax situation.
Aylett Grant Tax LLP is a full service accounting firm with a dedicated team of experts, who are highly-qualified and experienced in handling situations related to U.S., Canada and other international tax laws.
We can assist with:
• Canadian Personal and Corporate tax returns
• Cross Border Taxation and Business Planning
• U.S. Personal and Corporate Taxation
• Disclosure of Foreign Assets and other information filings
• Retirement planning
• Estate Planning, Inheritance tax advice
Disclaimer: The information in this publication is accurate as of the time of its publication. AG Tax assumes no responsibility for changes to tax legislation subsequent to the publication of this document. The information provided is for general information purposes only and should not be acted upon without seeking professional advice. If you would like to engage our services, please contact our staff and obtain authorization to send our firm confidential information. A client relationship is not created by the transmission of information. A client relationship is only formed with our firm when a scope and engagement letter signed by the firm and the potential client detailing the terms of engagement is present.
