Consider the following hypothetical scenario involving trading with margin in Canada w/ made-up exchange rates:
- I take out a $100,000 USD loan on Jan/01 - ($150,000 CAD)
- I lose all of it immediately in the market - ($150,000 CAD capital loss occurred)
- I still have a $100,000 USD loan remaining
- I work and save up for 2 years to pay it off
- I pay off the $100,000 USD [+$10,000 USD interest] - ($200,000 CAD) [+$20,000 CAD interest]
How exactly am I supposed to do accounting for the last line? Did I just incur an additional $50,000 CAD capital loss with a deductible $20,000 CAD interest expense? Is it some sort of adjustment? What exactly is it? Could someone provide some insight on what is the "right way" to do this?