# Tax Question



## cjm815 (May 6, 2016)

Quick Tax Question:

I have a monthly fee tied to my brokerage account for not having a minimum monthly balance. It is usually $10/month. My question is how do I handle this as a tax deduction or If I can claim this even. I know brokerage fees for security transaction is just added too your adjust cost basis and later reduces your capital gains. I'm thinking I can claim this on line 221, as a carrying charge. My basis is that it is a "fee to manage or take care of your investments".

Thanks for any help and insight.


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## AltaRed (Jun 8, 2009)

I'd include it as a carrying charge.


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## cjm815 (May 6, 2016)

AltaRed said:


> I'd include it as a carrying charge.


Thank you AltaRed


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## like_to_retire (Oct 9, 2016)

cjm815 said:


> Quick Tax Question:
> 
> I have a monthly fee tied to my brokerage account for not having a minimum monthly balance. It is usually $10/month. My question is how do I handle this as a tax deduction or If I can claim this even.


You didn't make it clear if this was a registered account or not? I believe it may make a difference.

ltr


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## OnlyMyOpinion (Sep 1, 2013)

I would have said that monthly account fees are not deductable (whether a non-registered account or not).
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns206-236/221/menu-eng.html
- fees paid for to manage or take care of your investments (fees paid for the management of your investments)
- fees for certain investment advice (investment counsel)


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## AltaRed (Jun 8, 2009)

Agree it only applies to non-registered accounts. Should have made that clear in my original post.


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## cashinstinct (Apr 4, 2009)

OnlyMyOpinion said:


> I would have said that monthly account fees are not deductable (whether a non-registered account or not).
> http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns206-236/221/menu-eng.html
> - fees paid for to manage or take care of your investments (fees paid for the management of your investments)
> - fees for certain investment advice (investment counsel)


fees to manage or take care of your investments (other than administration fees you paid for your registered retirement savings plan or registered retirement income fund);

It implies that administration fees for a non-registered investment account is OK.


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## OnlyMyOpinion (Sep 1, 2013)

I can certainly see that interpretation. It seems to depend what "manage or take care of" constitutes. I can't seem to find a definitive source that says monthly non-minimum fees would be deductable.
It is moot to me since one of our cardinal rules is "pay no fees".
Hopefully the OP has a answer they can run with.


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## R.A. (Feb 25, 2017)

OnlyMyOpinion said:


> I can certainly see that interpretation. It seems to depend what "manage or take care of" constitutes. I can't seem to find a definitive source that says monthly non-minimum fees would be deductable.
> It is moot to me since one of our cardinal rules is "pay no fees".
> Hopefully the OP has a answer they can run with.


It seems that some of the brokerages are starting to charge these administration fees for accounts that don't meet minimum thresholds for trading activity or balance level. It would make sense that CRA would indeed consider these fees (after all they are administration fees and I'm talking non-registered accounts in all cases of course) carrying charges and should be deductible on line 221 ("fees to manage or take care of your investments (other than administration fees you paid for your registered retirement savings plan or registered retirement income fund)". 

But semantically one pauses as the fee seems like kind of a punitive measure for lack-of-activity-accounts rather than a standard admin fee. But a fee is a fee right? I wonder if the fee *and *the HST can be deducted or only the actual fee? I would think both?


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## AltaRed (Jun 8, 2009)

I always include the GST/PST (HST) portion when claiming professional dues (legitimate unless it is a business with GST pass through in which case one cannot since it is not a bottom line cost). I don't see why GST/PST (HST) wouldn't be the same with the administration fee deduction.

Added: Bottom line, the deduction of $120/yr ($10/mo) admin fee is not worth much at a 15% tax credit. Worth a Starbucks or two.


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## peterk (May 16, 2010)

OP - I'm gonna try to claim it, as per AltaRed's advice in a previous thread on the subject..

http://canadianmoneyforum.com/showthread.php/69682-Can-minimum-commission-charges-be-applied-to-raise-your-ACB

Remember the Interactive Brokers fee is $10 USD.

You can look the exact CAD amount in Reports>Activity>Statements and there is an "Other Fees". If you click the details it will describe the fee as "Balance of Monthly Minimum Fee", that's exactly how I'm going to describe it in my Schedule 3.


AltaRed - It's a full deduction though right? Not a 15% credit? Goes on line 221 of the deductions page.


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## twa2w (Mar 5, 2016)

From a strict interpretation of the rules, it is not deductable as a carrying charge nor can you add it to the ACB of a stock.
However given the relatively small amount, I doubt CRA would question it. And if they did, it would be easy to argue the rules are not clear and at most you would pay the extra tax which would be pretty small.


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## AltaRed (Jun 8, 2009)

peterk said:


> OP - I'm gonna try to claim it, as per AltaRed's advice in a previous thread on the subject..
> 
> AltaRed - It's a full deduction though right? Not a 15% credit? Goes on line 221 of the deductions page.


Yes, indeed. It is a full deduction. Had a senior's moment I guess... my apologies.

However, if you are indeed talking about IB's 'balance of monthly minimum fee', that might be more questionable. Since you would already know that commissions are added to ACB, not expense deductible, I suppose it would be easy for CRA to say that the 'balance of monthly minimum fee' is not deductible either. It's much easier to argue the point (as per Twa2w's post) when it is a plain vanilla account fee.

That said, I think the worst CRA would do is to deny the deduction and assess you more tax...giving you X days to pay up to avoid interest.


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## peterk (May 16, 2010)

I suppose you could say that it is an "account fee". It just so happens to be an account fee that is reduced by each dollar of commission paid, but is entirely separate from commission, still.

In that sense it's an "account inactivity fee", which sounds an awful lot like a carrying charge.

I'll give it a whirl and see if they take it.


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