rukawa Posted March 7, 2020 Share Posted March 7, 2020 I use IB to invest in foreign stocks. IB's default is that you just invest directly in the foreign shares and they setup on automatic margin loan. They charge interest on the margin loan and they pay you interest on your cash balance in CAD. When IB send you your tax forms your T5 will automatically have the interest coming from your Canadian cash balance. However the interest you paid on your foreign negative cash balances is something you have to declare as Interest expenses on money borrowed to earn investment income which is line 221 of the federal tax return. As far as I can see the CRA only allow you to claim this interest if you are buying a share that is expected to pay dividends. See here: https://www.taxtips.ca/personaltax/investing/interestexpense.htm You can deduct interest and carrying charges incurred to earn income from securities, bonds and other Canadian or foreign investments, if they are earning investment income. I'm curious as to who has done this before and how they normally deal with this? Link to comment Share on other sites More sharing options...
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