investment planning

Is investment loan interest always a tax deduction?

minimize tax

by Edward Robertson

[UPDATE: 23 Jun 2018. After discussions with my accountant as to what deductions can actually be claimed, and remembering Garth Turner's pronouncement on the subject, the rules outlined in this blog post are decidedly the conservative, by-the-book version. Turner said: "Some advisors will tell you investment loans are only tax-deductible if the money is used to earn actual income (interest, dividends) as opposed to buying stuff that goes up in value (capital gains). In the real world, that’s hokum. The CRA will never enforce this arcane tax code verbiage for average investors." [3] ]

Investors in private market assets will likely contemplate at some point borrowing to invest. I thought it worthwhile to summarize rules around using investment loan interest as a tax deduction, and comment with respect to private market products.

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