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In a June 26, 2012 Technical Interpretation, CRA notes that generally, the payment or reimbursement of fitness membership fees by an employer results in a taxable benefit to the employee unless the employer can demonstrate that the membership is principally for the employer’s advantageTax Tips & Traps 2012

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In a February 27, 2012 Tax Court of Canada case, the taxpayer bought a unit in a condominium building at a ski resort near Callingwood, Ontario and stated that she purchased the unit in part because she wanted to ski, but the main interest was the possibility of earning rental income.

The Court generally allowed the rental losses claimed and noted that:

1.  It was not unreasonable for the Appellant to believe that the rental of the unit would not only pay the carrying costs, mortgage payments, property taxes and other fees but, also make some profit.

2.  It is important to determine whether the taxpayer has an activity carried out in a commercial manner.  A determination by the CRA should not be used to second-guess the business acumen of the taxpayer.  It is the commercial nature of the activity to be assessed, and not the taxpayer’s business acumen.

Therefore, the losses were allowed as a deduction with the exception that some of the expenses were capitalized (capital cost allowance was allowed).

Tax Tips & Traps 2012

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SCIENTIFIC RESEARCH AND EXPERIMENTAL DEVELOPMENT (SR&ED)

                        In two recent SR&ED cases, the Court found that SR&ED cannot be claimed unless it is established that the SR&ED was involved in overcoming a technical uncertainty that could not be resolved through routine test engineering.

Tax Tips & Traps 2012


 

 

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Travelling on the job?

Oct 09, 2012

PER DIEM MEAL ALLOWANCE

                        In a March 28, 2012 Technical Interpretation, CRA noted that an employer-provided meal allowance will not be taxable where the following conditions are met:

•    the allowance is a reasonable amount;

•    the allowance is received for travelling away from the municipality and the metropolitan area where the employer’s establishment, at which the employee ordinarily worked or to which the employee ordinarily reported is located; and

•    the travelling is done in the performance of the duties of an office or employment.

CRA’s current administrative policy provides that in some circumstances, employer-provided travel (including meal) allowances paid in respect of travel within a “municipality” or “metropolitan area” can be excluded from income.

CRA notes that, as a general rule, an employer can use the overtime meal allowance of $17 as a reasonable amount per meal.

Tax Tips & Traps 2012


 

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FEES PAID TO A MONTESSORI SCHOOL

In an April 12, 2012 Technical Interpretation, CRA notes that if an educational institution offers a full-day kindergarten program, the fees payable for that program are not deductible as a child care expense (CCE).

However, if an educational institution provides a separate or additional program of child care as well as a half-day or alternate-day kindergarten program, the part of the fees related to the separate child care program may qualify as a CCE.  Tax Tips & Traps 2012

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In a May 24, 2012 Technical Interpretation, CRA notes that an optional annual fee paid to a fund organized by the Music Parents Society as an optional school trip, would be an eligible CATC if the membership in the Organization is not part of a school’s curriculum, the membership lasts eight or more consecutive weeks, and more than 50% of the activities that the Organization offers to children include a significant amount of artistic, cultural, recreational or developmental activities.  Tax Tips & Traps 2012

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Sharon Hadden CGA is announcing the opening of a new accounting practice in the Comox Valley.  If the name sounds familiar, it should.  Sharon is the prior co-owner/manager of Fanny Bay Oysters, a company that grew to one of the largest employers in the Comox Valley over the twenty-plus years of ownership.  Sharon’s business experience has now been augmented by both an MBA degree and CGA designation and she is now accepting clients at her new office located at 200 - 457 Cliffe Ave. in Courtenay.

Phone: 250-871-7038      Fax: 250-871-7246

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