View Single Post
  #3 (permalink)  
Old 09-05-2017, 01:20 PM
Hova Hova is offline
Junior Member
Join Date: Dec 2013
Posts: 12
Hova is on a distinguished road

Thanks for the follow-up. This is, in fact, her legal expenses. In her tax filing, it has the name of her Laywers business noted in the line for the "Carrying Charges". She is essentially saying her Lawyer expended 8-9 hours solely on Child Support recalculation. Mine did it in 15 mins. Ex prefers to use lawyers for everything so mysupportcalculator is not an option with her.


Originally Posted by Desperate_Dad View Post
First of all, you are assuming that this deduction is for lawyers fees. More often than not, this deduction is for interest charges incurred when borrowing to purchase investments. That's probably what this is.

Now I'm no fan of divorcemate. This program is terrible and is the cause of much litigation. But here is what Divorcemate says.

Carrying charges and interest expenses
Input the party's annual tax deductible amounts of carrying costs and interest expenses (T1, Line 221). Note that the software will automatically deduct these carrying charges and interest expenses in the determination of the party's Guidelines Income and child and/or spousal support (CSG, Sch. III, s.8).
If a party incurs expenses in order to earn income from investments, a tax deduction may be taken.
Examples of tax deductible carrying charges and interest expenses paid include (ie. not exhaustive):
 fees to manage or take care of investments (other than RRSP or RRIF administration fees);
 safety deposit box charges;
 some accounting and investment counsel fees;
 interest on money borrowed to earn investment income;
 fees for certain investment advice or for recording investment income;
 policy loan interest (T2210);
 repayment of income tax refund interest from reassessment;
 carrying charges for Canadian and foreign investment income;
The following are not tax deductible:
 interest paid on money borrowed for RRSP, RESP, registered disability savings plan, or Tax-Free Savings Account;
 interest part of student loan repayments;
 subscription fees paid for financial newspapers, magazines or newsletters;
 brokerage fees or commissions paid when securities bought or sold.

I do not agree that these expenses should be deducted.

In my view, here is what you should do assuming these are interest charges on investment expenses.

1. Exclude the investment income that is included in Line 150. Personally you shouldn't use Line 150 at all and just add the income applicable for support purposes.

2. Once that is done, carrying charges should not be included as a deduction.

If this does happen to be lawyers fees they are trying to deduct, I would not allow it.
Reply With Quote