Borrowing To Invest
Record this when you transfer borrowed funds from your credit account to your brokerage. If brokerage margin exists, the transfer can repay that margin first.
What you enter
| Field | Required | Description |
|---|---|---|
| Amount | Yes | Total amount transferred |
| Credit withdrawal date | Yes | When funds left your credit account |
| Brokerage deposit date | Yes | When funds arrived in your brokerage |
Credit withdrawal date must be on or before the brokerage deposit date.
What happens
If the brokerage has no margin debt:
- Non-deductible principal increases by the full amount — the borrowed money is not yet invested, so it doesn't generate deductible interest until you purchase securities
- Borrowed cash in brokerage increases by the full amount
If the brokerage has margin debt:
- The credit advance repays brokerage margin first
- The repaid margin debt moves to the credit account with the same deductible/non-deductible character
- Any excess beyond the margin balance becomes borrowed brokerage cash
Common questions
What if I borrow more than I end up investing? The remainder stays as non-deductible principal. You can invest it later or withdraw it.
What if the money passes through a chequing account? That's fine. Use the date it left your credit account and the date it arrived in your brokerage.
Why would a credit advance repay margin first? This is refinancing. The debt moves from your brokerage to your credit line, but the use of the borrowed money stays the same.
Learn more
- How interest deductibility works — why tracing borrowed funds matters
- Brokerage margin — how margin refinancing works
- Setting up your first tracking — the basic borrow-invest cycle