Interest expense
In the calculation of your motor vehicle expenses, you can deduct the interest on money you borrowed to buy a motor vehicle, zero-emission vehicle, passenger vehicle or a zero-emission passenger vehicle that you use to earn rental income.
However, there is a limit on the amount of interest you can deduct when you use a passenger vehicle or zero-emission passenger vehicle to earn rental income. The amount of interest you can deduct is limited to the lesser of the following two amounts:
- Total interest payable for the year
- $10 × the number of days for which interest was payable in the year (use $8.33 for passenger vehicles bought between December 31, 1996, and January 1, 2001)
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