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the HERALD Wednesday January 1992 323 5 SPEED Frt PDI taxos Auto Trans P S extra Price Includes all manufacturers incentives 14 IN STOCK PLUS THE BEST WARRANTY IN THE BUSINESS WELL GUARANTEE YOU A LOWER PRICE The Place for Unbeatable Prices and Service 357 Queen Street East Acton 5198530200 7 in Generally if one borrows funds to purchase an incomeearning investment the interest expense deductible It is not necessary to earn income from the invest to deduct the interest rather it must be reasonable to expect that the investment will earn income It should be noted that income does not include capital gains The tracing of the borrowing to the use of the funds is critical demonstrating that the interest expense is deductible It must be remembered that in tax matters the taxpayer has the onus of the deductibility of an ex pense One point that you should con is the ability to transform don deductible interest into deductible interest This would see the use of available cash to pay down personal loans and then borrowing for investments made to earn income Thus the per loan on which the interest is not deductible is reduced The borrowing is clearly traced to the earning of income and thus the in terest expense is deductible In deciding which debt to pay down one should always pay down per sonal debt such as mortgages or credit card balances first For individuals if you wish to claim an interest expense deduc tion you must ensure that the payments have been made prior to December 31 The implementation of any tax saving strategy is based on your personal financial situation Pro fessional advice should be obtain ed before implementing any of the suggestions contained herein You can discuss these and other tax planning ideas with your local partner who is filiated with Leadley Gunning and Culp International Gunning and Culp International is a sophisticated management consulting group assisting ac counting and tax professionals run more successful practices In your area your local partner is Gary A Accounting and Tax Professional 232 St Suite Lower Level Georgetown Ontario L7G 416 Big Brothers in need Big Brothers of is con their search for volunteers and this year the effort will be greater as the number of boys in creases quickly At present there are 30 boys waiting for Big Brothers for more information on the program and about becoming a Big Brother call the organization at 72G7 or I