Property Flipping: Income or Capital?
House Flipping

Property Flipping: Income or Capital?

In an August 14, 2019 Tax Court of Canada case, at issue was whether the sales of four properties in B.C. were on account of income (fully taxable) or capital (half taxable), and whether they were eligible for the principal residence exemption (potentially tax-free) as claimed by the taxpayer, a real estate agent. Essentially, the Court was trying to determine if the properties were purchased with the intent to re-sell for a profit, or for…

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Reimbursement For Work Clothing: Taxable

Reimbursement For Work Clothing: Taxable

In an April 17, 2019 Technical Interpretation, CRA was asked whether clothing reimbursements paid to maintenance employees were taxable benefits. Employees were not required to wear specific uniforms and were reimbursed based on receipts, to an annual maximum. CRA referred to Guide T4130 Taxable Benefits and Allowances, which states that clothing is generally a personal expense, except where either of the following applies: the employee is required to wear a distinctive uniform while carrying out…

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Special Work Site Allowance: Home Base Needed

Special Work Site Allowance: Home Base Needed

In a January 29, 2019 Technical Interpretation, CRA discussed the criteria for tax-exempt allowances for board and lodging received for periods an employee was working at a special work site. To be a special work site, the following criteria must be met: the work performed at the location must have been of a temporary nature;the employee must have maintained a self-contained domestic establishment (SCDE) elsewhere which was used as their principal place of residence;the SCDE…

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Childcare Costs: Art, Sport, and Education

Childcare Costs: Art, Sport, and Education

A September 11, 2018 Tax Court of Canada case examined the eligibility of a number of child care costs with a recreational and educational component. The taxpayer and his spouse worked full time and had two children, aged 10 and 12. The Court acknowledged two separate lines of cases related to eligibility of child care expenses (all informal and, therefore, not binding on CRA).  The first set, argues that the definition of a “child care…

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