Date: 20021118
Docket: 2001-3957-IT-I
BETWEEN:
NORM JASCHINSKI,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
For the Appellant: The Appellant himself
Counsel for the Respondent: Meghan Castle
Reasons for Judgment
(Delivered orally from the Bench at
Hamilton, Ontario, on May 30, 2002)
McArthur J.
[1] This is an appeal from an assessment of tax made for the 1999 taxation year wherein the Minister of National Revenue disallowed moving expenses under section 62 of the Income Tax Act.
[2] In March 1998, the Appellant was promoted and transferred by his employer, Federal Express, from Calgary to Toronto where he is in senior management. His 1999 income tax return indicates a gross income of approximately $170,000. His new job started immediately. He and his wife, who was pregnant with their first child, found themselves in a difficult housing market in Toronto. They made a quick and temporary purchase of a home in Mississauga moving in on May 1, 1998. They purchased this home in a rising market with the intention of finding a permanent home when their baby was born. They were not under tremendous stress to find a place to live.
[3] In December 1999, the Appellant and his wife completed a purchase and moved into their permanent home in Campbellville. The Appellant claims moving expenses of $26,860 which includes $16,552 commission for the sale of the Mississauga home. The amounts are not in dispute. In 1998, the Minister accepted the Appellant's expenses of $3,125 paid by him to move from Calgary to Mississauga and not reimbursed by his employer.
[4] The Appellant submits that his move was from Calgary to Campbellville with an interim stay in Mississauga to be considered as a hotel or stopover before finding their permanent home. Taken from the Notice of Appeal, he states:
In summary, I wish to claim the expenses for the move from my temporary to permanent housing in Toronto as a part of the overall move from Calgary to Toronto, which was necessary for work reasons. I believe I have a valid claim which is not only consistent with current tax legislation but consistent with the intention of the relocation tax policy; which, in this case, is to partially offset the high cost of work related relocation to promote employment opportunities.
He also adds that his claim is reasonable, logical, timely, and within the legislative spirit of section 62.
[5] The Respondent's position is that the move from Calgary to Mississauga in May 1998 is the only move that meets the requirements of section 62. The second move, 19 months later to Campbellville placed the Appellant even farther from work than the Mississauga home and does not meet and cannot be deducted pursuant to section 62. This section reads in part as follows:
62(1) There may be deducted in computing a taxpayer's income for a taxation year amounts paid by the taxpayer as or on account of moving expenses incurred in respect of an eligible relocation, to the extent that
(a) they were not paid on the taxpayer's behalf in respect of, in the course of or because of, the taxpayer's office or employment;
(b) they were not deductible because of this section in computing the taxpayer's income for the preceding taxation year;
(c) the total of those amounts does not exceed
(i) in any case described in subparagraph (a)(i) of the definition "eligible relocation" in subsection 248(1), the taxpayer's income for the year from the taxpayer's employment at a new work location or from carrying on the business at the new work location, as the case may be, and
(ii) in any case described in subparagraph (a)(ii) of the definition "eligible relocation" in subsection 248(1), the total of amounts included in computing the taxpayer's income for the year because of paragraphs 56(1)(n) and (o); and
(d) all reimbursements and allowances received by the taxpayer in respect of those expenses are included in computing the taxpayer's income.
[6] I accept the Appellant's position that there was realistically only one move from Calgary to Campbellville. I find the fact situation in this appeal similar to that dealt with by Judge Bowman in Ringham v. The Queen, 2000 DTC 2060. For brevity, I will not review Ringham in any detail but I accept Judge Bowman's reasoning completely and apply it to the present case. The Mississauga home was never regarded by the Appellant as his ordinary residence. This was not a contentious issue. He and his wife had to find a temporary place to live in April 1998. They were expected to move as soon as possible from Calgary and they moved from the temporary home in Mississauga to their permanent home in Campbellville as soon as was practical and possible.
[7] The appeal is allowed and the assessment referred back to the Minister for reconsideration and reassessment on the basis that the Appellant is entitled to deduct $24,000 in moving expenses in computing his income for the 1999 taxation year under section 62. The Appellant is entitled to costs fixed at $100. I indicate that the amount claimed by the Appellant is $26,860 but reduced, of course, to $24,000, which is the limit under the informal procedure which was chosen by the Appellant.
Signed at Ottawa, Canada, this 18th day of November, 2002.
|
"C.H. McArthur" |
J.T.C.C.
COURT FILE NO.: 2001-3957(IT)I
STYLE OF CAUSE: Norm Jaschinski and Her Majesty the Queen
PLACE OF HEARING: Hamilton, Ontario
DATE OF HEARING: May 28, 2002
REASONS FOR JUDGMENT BY: The Honourable Judge C.H. McArthur
DATE OF JUDGMENT: June 17, 2002
APPEARANCES:
For the Appellant: The Appellant himself
Counsel for the Respondent: Meghan Castle
COUNSEL OF RECORD:
For the Appellant:
Name: N/A
Firm: N/A
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada