Canadian Tax Question on Bonds

[beerbaron]

I am currently in the process of refinancing my house and a large chunk of money is going to get into my bank account. If I invest this chunk of money in say bonds, can I deduct the interests I pay on the mortgage from the bond income?

 

BeerBaron

[finetrader]

if interest incurred is from a capital that is used to earn a revenue (or capital gain) then it is tax deductable.

 

A friend of mine had this idea that if you have money invested outside a RRSP or TFSA, and you have a mortgage, you then take the money to pay the mortgage, then, you withdraw the money through a HELOC, and invest it back. It is a way to deduct interest from your mortgage in Canada.