[human-golf]

Assuming I had a joint line of credit account, which was only used by me and not the other account holder. And those funds from the account were placed in a brokerage account under my name only to invest. Would I be able to deduct 100% of the interest from the line of credit on my tax returns? Or would the interest have to split amongst the account holders?

Thank you

 

[Manestream]

You would be able to deduct 100% of the interest paid on the loan used for investment purposes. The fact that the line of credit is joint is irrelevant. CRA will trace use of the funds to determine deductibility of interest so make sure that the investments meet CRA requirements i.e. shares of corporations that have a reasonable expectation of paying dividends now or in the future....as one example.

 

[Retiredguy]

I say yes - 100% you can deduct. You are the true borrower, investor and will be reporting 100% of the investment proceeds. The other person on the lOC is akin to a guarantor imo and has zero likelihood of receiving/reporting any investment proceeds....but I'm not a tax expert just an investor who has deducted interest in the past when I invested mortgage money and my wife was joint on the mortgage.

 

[human-golf]

Ok, this is great. Thank you both!

 

[Eclectic12]

+1 ... my understanding is that who borrowed it and used it to buy eligible investments that determine how much one can deduct (same as who has to report the gains/loss).


Cheers