Whether the interest survives scrutiny
Deducting interest on borrowed money in Canada turns on what the money was used for, whether that use can be traced, and what you can still show years after the fact. These pages set out the tests and the case law they come from, with citations to primary sources — so your accountant can check them rather than take our word for it.
HELOC interest, and what deductibility turns on in Canada
What a Canadian interest claim rests on — the use test, current use, and the tracing each demands — with every rule cited to the Act, the courts, or the CRA.
Read heloc interest, and what deductibility turns on in canada →Is the Smith Manoeuvre legal in Canada, and what actually breaks it
The strategy is an ordinary use of the interest rules. What fails is the trail — one line carrying two purposes, and the pro-rata rule the CRA has published.
Read is the smith manoeuvre legal in canada, and what actually breaks it →Most readers arrive at one of two ends of this. If the question is whether an interest claim stands up at all, the use test and the tracing it demands is where the rules and their sources are. If the strategy is already running and the records are mixed, start with what a single line carrying two purposes does to the arithmetic.