130 – Interest and other investment income

Interest

As a rule, interest you must report is shown on your RL-3, RL-13, RL-15 and RL-16 slips or, if you did not receive those RL slips, on your T3, T5 and T5013 slips. You must also report all interest for which you do not have RL slips or other information slips, including interest you received in 2016 on a loan made to an individual and on income tax refunds.

Methods for reporting interest

There are three methods for reporting interest from investment contracts (bonds, savings bonds, term deposits, bearer debt obligations, etc.). You can use a different method for each investment contract.

Cash method

As a rule, you must report the interest that you received or that was credited to you in 2016, except for amounts that you reported in previous years. However, for investment contracts entered into after 1989, you must report, each year, the interest earned up to the anniversary of the date on which the investment was acquired. This interest may be shown in box D of your RL-3 slip.

Accrual method

Each year, you must report interest accrued from January 1 to December 31.

Receivable method

Each year, you must report interest that falls due during the year. For example, you would report interest on municipal bond coupons that have matured but have not been cashed in.

Joint accounts

If you held an account jointly with another person, report only the interest corresponding to your contribution to the account. 

Bearer debt obligations

You can calculate the interest you earned on bearer debt obligations, such as Treasury bills or bank acceptances, using the information provided on your RL-18 slip (or your T5008 slip if you did not receive an RL-18 slip) or on the statement of account or transaction record received from a stockbroker or an institution.

If you cashed in or disposed of the securities after the maturity date, the difference between the proceeds of disposition (This link will open a new window) (box 21 of the RL-18 slip) and the price you paid for the securities constitutes interest income.

If you cashed in or disposed of the securities before the maturity date, the difference between the proceeds of disposition (This link will open a new window) and the price you paid for the securities may also constitute a capital gain or loss. For more information, contact us.

Other investment income

Other investment income includes: 

  • your investment income, which may be shown in box E of your RL-3 slip and in box G of your RL-16 slip;
  • your royalties, which may be shown in box H of your RL-3 slip;
  • the benefits you received as a shareholder of a corporation, which may be shown in box O of your RL-1 slip. Do not report on line 130 the amount to be included in the calculation of your income for an advance or a loan that was not repaid, but enter it on line 154;
  • your gross foreign investment income, which may be shown in box F of your RL-3 slip, box 8 of your RL-15 slip or box F of your RL-16 slip;
  • your foreign income shown in box E of your RL-16 slip (this income constitutes property income);
  • investment income accrued after the death of the holder of a trusteed tax-free savings account (TFSA) and paid to you in the year. This income is shown in box O of the RL-1 slip.

Foreign investments

Your gross foreign investment income must be reported in Canadian dollars. To convert the amounts, use the exchange rate in effect at the time you received the income or at the time it was credited to you. You can use the average exchange rate for the year if you received the income over the entire year. To find out the exchange rate, consult the Bank of Canada website.

You may be entitled to a foreign tax credit. See the instructions for line 409.

Last Updated: