SCHEDULE 7 (diagnostic)

T2
1

Working on a T2.
Taxpayer received a nominal amount of interest from the CRA on their GST/HST account from a refund that was outstanding.

I entered the interest income under Other Income on the S125 in GIFI 8094 (Interest from other Canadian sources).

I’m getting a diagnostic on Schedule 7 at box 032.

Please see screen shoots below:

Diagnostic
S7 - REVIEW MARK

Schedule 7

S7 BOX 032
S7 BOX 0321129×576 144 KB

Should I simply enter the amount of interest earned from the GST/HST refund in the interest income cell on Schedule 7?

2

Incidental interest income doesn’t have to be reported as passive. Just check off the diagnostic message.

1 Like
3

If you enter anything on schedule 7, you’re triggering high-rate tax. This is incidental to the main business activity and should not trigger a schedule 7 entry. Clear the diagnostic and carry on.

2 Likes
4

Thank you for the helpful replies.