What are carrying charges and interests deductible on line 221

Certain carrying charges and interests you paid to earning investment income can be deducted on line 221. The deductible carrying charges and interests include:

    •  Investment manage and custody fees;
    • fees paid to investment counsellors for advice on buying or selling shares
    • fees paid to recording investment income;
    • tax preparation fees if you have income from a business or investments and accounting is necessary.
    • Legal fees you paid to establish, collect, or increase the amount of child or spousal support.
    • Interest on loan you borrow to earn investment income including interest and dividends.
    • Interest paid on a policy loan made to earn income. (Form T2210, Verification of Policy Loan Interest by the Insurer is required.)

Fees related to registered accounts including Registered Retirement Savings Plan (RRSP), Registered Retirement Income Fund (RRIF),  Registered Education Savings Plan (RESP), and Tax-free savings account (TFSA) are not deductible.

Safety deposit box fees deduction is no longer available for 2014 and after.

Commissions are specifically excluded from the definition of investment fees because commission fees are not for investment advisory services but for a transaction. However, commissions increase the adjusted cost base (ACB) of an investment at purchase and reduce the proceeds when the investment is sold. Commissions, therefore, reduce the potential capital gain (or increase a loss) on an investment, and, in turn, the resulting tax payable.