Comments on: Playing on Words with the CRA http://www.thefinancialblogger.com/playing-on-words-with-the-cra/ This is where your finance takes place Thu, 09 Feb 2012 04:02:52 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Transcendental Success http://www.thefinancialblogger.com/playing-on-words-with-the-cra/comment-page-1/#comment-2741 Transcendental Success Wed, 16 Jul 2008 13:07:09 +0000 http://www.thefinancialblogger.com/playing-on-words-with-the-cra/#comment-2741 I think that most stock market investments qualify because you would expect them to pay some kind of dividend someday. As you know from your MBA finance classes, the value of the stock is supposed to be the present value of all the future dividends. You could easily argue that every stock, unless they specifically say something like "We're not paying dividends", will eventually generate excess cash and pay dividends to the shareholders. Maybe the capital gains are larger than the dividends by the time you sell, but it's still an income investment. It's the same with a business. You can deduct business expenses as long as there is an expectation of profit. It doesn't mean that profit actually has to come. I (I'M NOT AN ACCOUNTANT) would deduct all my investment related interest. If there was a portion later that was found to be categorized incorrectly then I'll take that risk rather than give the government $5K that I might not have to. I think that most stock market investments qualify because you would expect them to pay some kind of dividend someday. As you know from your MBA finance classes, the value of the stock is supposed to be the present value of all the future dividends. You could easily argue that every stock, unless they specifically say something like “We’re not paying dividends”, will eventually generate excess cash and pay dividends to the shareholders. Maybe the capital gains are larger than the dividends by the time you sell, but it’s still an income investment.

It’s the same with a business. You can deduct business expenses as long as there is an expectation of profit. It doesn’t mean that profit actually has to come.

I (I’M NOT AN ACCOUNTANT) would deduct all my investment related interest. If there was a portion later that was found to be categorized incorrectly then I’ll take that risk rather than give the government $5K that I might not have to.

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