Carrying charges on line 22100: investment interest and fees only

What goes on line 22100, and what does the CRA refuse?

Line 22100 is for carrying charges and interest your client paid to earn income from investments. The CRA list for 2025 returns sorts cleanly into allowed and denied items canada.ca, and each one traces back to a specific rule in the Income Tax Act.

The ITA references come from sections 18 and 20 laws-lois.justice.gc.ca. The registered plan denials sit in 18(11) for borrowing and 18(1)(u) for fees, and 18(1)(l.1) shuts out safety deposit boxes laws-lois.justice.gc.ca.

Which investment fees qualify under 20(1)(bb)?

Paragraph 20(1)(bb) allows a fee, other than a commission, paid to a person whose principal business is advising others on buying or selling specific securities, or includes administering or managing securities. The fee must be for advice on your client's own securities or for administering them laws-lois.justice.gc.ca. A flat percentage fee on a managed account fits. A commission on a trade doesn't, so it goes into the adjusted cost base or reduces the proceeds instead.

The common error is a single fee invoice covering several accounts. Fees for services to an RRSP, RRIF, TFSA or FHSA your client holds are denied by 18(1)(u) laws-lois.justice.gc.ca, so only the share billed to the taxable accounts goes on line 22100. Ask the dealer for the fee by account, because the year end summary often lumps them together.

When is the interest deductible?

Interest qualifies under 20(1)(c) when it's paid or payable under a legal obligation on borrowed money used to earn income from a business or property laws-lois.justice.gc.ca. The CRA's Folio S3-F6-C1 says the test looks at the current use of the money, not the original use, and your client carries the burden of tracing the borrowed money to an eligible use canada.ca.

Common shares pass because there's a reasonable expectation of dividends, and the CRA applies the same view to mutual funds. The exception is a corporation that has said it does not pay dividends and isn't expected to in the foreseeable future. Then the purpose test fails, since a reasonable expectation of capital gains alone doesn't count (Folio paragraphs 1.27 and 1.70) canada.ca.

A line of credit used for both personal and investment spending is apportioned. In the Folio's Example 10, 40% of a $100,000 line went to investments. After a $20,000 repayment, interest on 40% of the $80,000 balance ($32,000) stays deductible, because repayments reduce both portions canada.ca. For the full 20(1)(c) analysis, including sold investments and section 20.1, see interest deductibility.

How much of $16,890 in investment costs goes on line 22100?

Your client lives in Ontario. In 2025 she paid the amounts below. The 6% loan rate and the fee figures are illustrative.

Of the $16,890 paid, $13,050 goes on line 22100. If her dividends were only $7,500, the federal claim stays at $13,050: the Folio says interest is neither denied nor restricted to the income the investment produces (paragraph 1.69) canada.ca. The excess still matters, because it feeds the AMT and CNIL calculations covered below.

Can carrying charges exceed investment income?

Federally, yes. The Folio quotes the Supreme Court in Ludco: "income" in 20(1)(c)(i) means income generally, not net income, and the sufficiency of the income isn't the test (paragraph 1.27) canada.ca. A line 22100 claim larger than the investment income reduces your client's other income.

Quebec is different. Revenu Québec says the investment expenses your client deducts can't exceed investment income. A claim on line 231 for carrying charges and interest triggers Schedule N, and the excess is added back on line 260. The amount added back can reduce net investment income of the previous three years (Form TP-1012.B-V) or of future years revenuquebec.ca. Several tax software blogs apply the Quebec cap to the federal return. It doesn't belong there.

How can a big line 22100 claim cost your client later?

Under the alternative minimum tax, only half of amounts deducted under 20(1)(c) to (f) and (bb) to earn income from property count, so half of line 22100 comes back into the AMT base laws-lois.justice.gc.ca. See the full add back table on the AMT page.

The second cost is CNIL. Investment expenses, which include amounts deducted in computing income from property, minus investment income, totalled for every year after 1987, form the cumulative net investment loss laws-lois.justice.gc.ca. A positive balance cuts the lifetime capital gains exemption dollar for dollar, so a client planning to sell qualified small business shares should know the balance before the sale.