BLOGGER’S BUSINESS LOSSES

In a June 19, 2015 Tax Court of Canada case (Berger vs. H.M.Q., 2014-4251(IT)I), at issue was whether the taxpayer could claim business losses incurred for the 2011 and 2012 years. During these years, the taxpayer started and operated a sports blog with the intention of selling advertising on the blog, which he did in 2012. The taxpayer incurred expenses which were primarily comprised of travelling expenses to attend the teams’ away games. Prior to 2011 the taxpayer was employed as a sports journalist at a radio station.

Taxpayer wins
The Court found that the taxpayer was carrying on a business and, therefore, was entitled to deduct losses in 2011 and 2012. The Court examined the taxpayer’s “businesslike” behaviour including:

• The taxpayer’s training

For further information see VTN Monthly Tax Update Seminar, Issue No. 408

PROFESSIONAL MEMBERSHIP DUES

In a March 5, 2015 Technical Interpretation (2014-0530691E5, Baltkois, Thomas), CRA noted that Subparagraph 8(1)(i)(i) provides a deduction in computing income from an employment for annual professional membership dues, the payment of which is necessary to maintain a professional status recognized by statute. Generally, the deduction is only allowed to the extent that the professional membership dues reasonably relate to the individual’s employment income.

For further information see VTN Monthly Tax Update Seminar, Issue No. 407

REQUIREMENT TO PREPARE T4 SLIPS

In a May 7, 2015 Tax Court of Canada case (7547978 Canada Inc. vs. H.M.Q., 2013-2929(IT)I), CRA successfully argued that the workers were employees, and, the T4A Slips issued by the payer should really have been T4 Slips. CRA penalized the payer under Subsection 162(7) for failing to file T4 Slips for the workers.

For further information see VTN Monthly Tax Update Seminar, Issue No. 407

RENTAL OF EXCESS PARKING SPOTS

In a February 3, 2015 Technical Interpretation (2014-0542791E5, Townsend, A.), CRA discussed whether the rental of excess parking spots by an NPO affordable housing provider would make the Organization ineligible for the Paragraph 149(1)(l) exemption from Part I tax.

The Courts have determined that a profit can be earned as long as it is incidental and arises from activities directly connected to the not-for- profit objectives. CRA noted that, in this case, the direct connection test would likely not be met, however, such a determination is fact based. Factors which may change the determination include:

• (a) how and why the extra parking spots were acquired by the housing provider; and,
  (b) why the extra spots continue to be maintained.

  For further information see VTN Monthly Tax Update Seminar, Issue No. 407

BOOKS AND RECORDS RETENTION

In a May 11, 2015 Technical Interpretation (2014-0548841E5, Godson, G.), CRA noted in the absence of an exception, a corporation’s non- permanent records must be retained for a period of six years after the end of the last taxation year to which they relate. Also, such records on hand at the date of dissolution must be retained for two years after the date of dissolution (Paragraph 230(4)(b) and Regulation Paragraph 5800(1)(b)).

For further information see VTN Monthly Tax Update Seminar, Issue No. 407