[OFFICIAL ENGLISH TRANSLATION]
1999-1403(IT)I
BETWEEN:
CARMELLE VACHON,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeals heard on common evidence with the appeals of Nelson Vachon 1999-1404(IT)I, on August 10, 2001, at Kingston, Ontario, by
the Honourable Judge Gerald J. Rip
Appearances
For the Appellant: The Appellant herself
Counsel for the Respondent: Gatien Fournier
AMENDED JUDGMENT
The appeals from the assessments made under the Income Tax Act for the 1993, 1994 and 1995 taxation years are allowed, with costs, if any, and the assessments are referred back to the Minister of National Revenue for reconsideration and reassessment on the basis that:
(a) the amount of $11,756.34 representing 50 percent of the expenses of $23,512.67; the amount of $11,516.17 representing 50 percent of the expenses of $23,032.34; and the amount of $10,515.81 representing 50 percent of the expenses of $21,031.61 for the Florida condominiums are deductible for the 1993, 1994 and 1995 taxation years respectively;
(b) the amount of $5,598.96 representing 50 percent of the expenses of $11,197.93 for the Hull property is deductible for the 1995 taxation year.
(c) for clarification, the revenues earned from the condominiums in Florida were:
1993 1994 1995
$5,012.73 $4,291.20 $10,714.68
and Carmelle and Nelson Vachon were each entitled to 50 percent of those revenues. Therefore, the expenses that are deductible from the other revenues for Carmelle and Nelson Vachon for the 1993, 1994 and 1995 taxation years are $9,249.97, $9,655.57 and $4,158.47 respectively, for each.
The appellant is entitled to no other relief.
Signed at Ottawa, Canada, this 18th day of July 2002.
|
"Gerald J. Rip" |
J.T.C.C.
Translation certified true
on this 6th day of October 2003.
Sophie Debbané, Revisor
[OFFICIAL ENGLISH TRANSLATION]
1999-1404(IT)I
BETWEEN:
NELSON VACHON,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeals heard on common evidence with the appeals of Carmelle Vachon 1999-1403(IT)I on August 10, 2001, at Kingston, Ontario, by
the Honourable Judge Gerald J. Rip
Appearances
For the Appellant: The Appellant himself
Counsel for the Respondent: Gatien Fournier
AMENDED JUDGMENT
The appeals from the assessments made under the Income Tax Act for the 1993, 1994 and 1995 taxation years are allowed, with costs, if any, and the assessments are referred back to the Minister of National Revenue for reconsideration and reassessment on the basis that:
(a) the amount of $11,756.34 representing 50 percent of the expenses of $23,512.67; the amount of $11,516.17 representing 50 percent of the expenses of $23,032.34; and the amount of $10,515.80 representing 50 percent of the expenses of $21,031.61 for the Florida condominiums are deductible for the 1993, 1994 and 1995 taxation years respectively;
(b) the amount of $5,598.96 representing 50 percent of the expenses of $11,197.93 for the Hull property is deductible for the 1995 taxation year.
(c) for clarification, the revenues earned from the condominiums in Florida were:
1993 1994 1995
$5,012.73 $4,291.20 $10,714.68
and Carmelle and Nelson Vachon were each entitled to 50 percent of those revenues. Therefore, the expenses that are deductible from the other revenues for Carmelle and Nelson Vachon for the 1993, 1994 and 1995 taxation years are $9,249.97, $9,655.57 and $4,158.47 respectively, for each.
The appellant is entitled to no other relief.
Signed at Ottawa, Canada, this 18th day of July 2002.
|
"Gerald J. Rip" |
J.T.C.C.
Translation certified true
on this 6th day of October 2003.
Sophie Debbané, Revisor
[OFFICIAL ENGLISH TRANSLATION]
Date: 20020705
Docket: 1999-1403(IT)I
BETWEEN:
CARMELLE VACHON,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent,
AND BETWEEN:
1999-1404(IT)I
NELSON VACHON,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Rip, J.T.C.C.
[1] During the 1993, 1994 and 1995 taxation years, Nelson Vachon and his spouse Carmelle Vachon (the "appellants") owned three condominiums at the same location in Englewood, Florida ("Florida properties" or "Palm Manor Resort"). They had jointly acquired two of those condominiums in 1985 and the third in 1990. In March 1990, the appellants acquired a detached house in Mississauga, Ontario ("Mississauga property"), which they sold in November 1994. Since May 1995, the appellants have owned a house in Hull, Quebec ("Hull property"). The appellants say they purchased the properties as investments.
[2] By the notices of reassessment dated December 15, 1997, the Minister of National Revenue ("Minister") disallowed the appellants' deduction of the rental expenses, which they had reported during the period in appeal with respect to the Florida properties and the Mississauga property. The Minister further disallowed the deduction of the rental expenses, which the appellants had reported during the 1995 taxation year with respect to the Hull property. The Minister also disallowed the deduction of the miscellaneous expenses (office, automobile, meetings, travel, accounting, telephone, CCA for computer, printer, facsimile, etc.), which the appellants had deducted for the 1995 taxation year.
[3] At the start of the trial, counsel for the respondent informed the Court that the Minister had admitted that the appellants were entitled to deduct rental expenses for the Hull property. The appellants accepted the Minister's refusal to allow the deduction of $3,474.94 (or $1,737.47 for each appellant) claimed in respect of current expenses for the Hull property for 1995. Those amounts represent capital costs, notary's fees, [TRANSLATION] "two months' rent paid to Étienne Lyotte for construction of the basement ..." and property transfer fees.
[4] The appeals were heard on common evidence. The appellant Carmelle Vachon filed a 20-page written explanation, which I have considered carefully; the transcript has also been reviewed. The judgments were suspended pending the Supreme Court's Reasons for Judgment in Stewart v. Canada.[1] Following that decision, I invited the parties to submit their comments. Counsel for the respondent wrote that, in view of the fact the Florida properties entailed no personal element, the rental activity was of a commercial nature and therefore a source of income from property. By virtue of the decision in Stewart, the respondent now admits that each of the appellants is entitled to deduct the rental losses claimed for the 1993, 1994 and 1995 taxation years for the Florida properties. Counsel for the respondent wrote that, in his view, the Mississauga property was of a personal nature, and it had not been operated in a sufficiently commercial manner to constitute a source of income. We agree with counsel for the respondent that the Florida condominiums were a good source of income from property and that the Mississauga property was not commercial and, consequently, the appellants are not entitled to deduct the rental losses claimed for that property.
[5] Although I agree that the expenses for the Florida condominiums are deductible by the appellants, I do not agree that all expenses claimed are deductible. The expenses claimed for the Florida properties include the amounts of $7,861.92 and $8,798.22 for the 1993 and 1994 taxation years respectively, reported by the appellants under the heading "Other", that is to say, "office, meeting, consultants and travel". I do not understand these "Other" claims. The Palm Manor Resort project was managed by a manager, not by the appellants. The expenses of the condominium units were pooled. The appellants explained neither the nature of those expenses nor the extent to which they had been incurred or made for the purpose of earning income from those condominiums. The "Other" expenses should not be considered in computing the deductible losses for the Florida condominiums. Consequently, the expenses that are deductible for the 1993 taxation year total $23,512.67 (the share of each appellant is 50 percent), not $31,374.59. The deductible expenses for the 1994 taxation year total $23,032.34 (the share of each appellant is 50 percent), not $31,830.56
[6] Among the expenses the appellants claimed in 1993 for the Florida condominiums was the sum of CDN $1,271.05 under the heading "insurance". However, among the expenses pooled in 1993 for the entire Palm Manor Resort project, the sum of US $4,804.26 appears under the heading "insurance". No explanation was given for this result. However, this was not questioned by the respondent, and I will therefore allow that the expenses claimed in respect of insurance be deducted.
[7] The appellants wrote that it appears from Stewart that all their rental activities constituted a source of income and that all the losses claimed are deductible. In the appellants' view, all their properties have always been operated in a sufficiently commercial manner in accordance with objective standards of businesslike behaviour. With respect to the Mississauga property, they argue that their intention was to make net business profits and that the personal aspect was secondary and of no significance.
[8] The appellants suggested in their correspondence, just as they did at the hearing, that, with respect to the Mississauga property, my findings were based on the fact that the Minister had agreed that the expenses for the Hull property were deductible. The taxpayers must be aware of the fact that the Court is not bound by a settlement between the parties to a case or by a concession given by one of the parties. A judge may always dismiss a settlement between parties or a concession, as I did with the concession made by counsel for the respondent respecting the expenses of the Florida condominiums.
[9] As to the Hull property, I accepted the concession the Minister made at the start of the hearing. Consequently, I did not consider any evidence on the question as to whether the expenses for the Hull property were in fact deductible. If I had to consider such evidence, including the examinations of witnesses, I would either have accepted or refused to accept the Minister's consent to the deductibility of the expenses for the Hull property. However, in considering the expenses for the Mississauga property as well as the nature of that property, I am not bound by what the Minister did or did not accept as a reasonable rent or deductible expenses for the Hull property.
[10] As a result of the decision of the Supreme Court of Canada in Stewart, the point for determination is not whether the appellants had a reasonable expectation of profit but rather whether the property was used in pursuit of profit and therefore whether it was a source of income from a business or property.
[11] There are thus two points for determination:
(a) whether the appellants were entitled to deduct rental expenses for the Mississauga property; and
(b) whether the appellants were entitled to deduct additional miscellaneous expenses claimed for the 1995 taxation year.
A. Mississauga Property
[12] According to the appellants, the Mississauga property was a "rooming house", as that term is defined in Interpretation Bulletin 434R of the Canada Customs and Revenue Agency ("CCRA"). They claim that their operational plan for the Mississauga property was to rent the four bedrooms for $600 a month each, with an annual increase of six percent. The appellants claim that the market rent was $1,075 a month for a similar property, and, consequently, the property was rented at more than market value.
[13] The appellants stated that, in 1990 and 1991, two of the four rooms had been permanently rented and a third was rented occasionally; as a result, they received an average income of $1,225 a month. One of the two tenants in 1990 and 1991, and the only tenant in 1992, was their son. In 1993, only one of the rooms was rented permanently to their son. According to the appellants, there was another tenant for part of 1993, but they were unable to collect the rent from him. In the first three months of 1994, the only tenant was the appellants' son. The appellant Carmelle Vachon said that her son's rent was fixed at $600 a month since he was on unemployment insurance and it was therefore impossible to ask him for a greater amount. She further stated that, in 1994, when her son's financial situation had improved, his rent was increased to $1,100 a month. The appellants contend that, in 1992, after losing one of the two permanent tenants, they put the house up for sale, but without success. In the meantime, they had placed a number of ads to rent the rooms and ultimately put the house back up for sale in 1994 and this time succeeding in selling it.
[14] According to the appellants, their operational plan included paying down substantial amounts of mortgage principal just as it was for their Florida properties. They claim that starting in 1993, there was a greater expectation of earning a profit from the Mississauga property since the operating profits were generated at the same time expenses and mortgage rates declined significantly.
[15] The appellants contend that they had no personal link to the Mississauga property, despite the fact that their son was one of the tenants and, in fact, the only tenant for certain parts of the year. They contend that, in addition to paying the same rent as any other tenant, their son also saw to the maintenance of the entire building (the common areas as well as the private areas occupied by the other tenants) and also supplied all the furniture and services a rooming house offers. They claim that the nature of the activity was strictly commercial and provided them with no personal benefit.
[16] According to the appellants, there was a reasonable expectation of profit, but it was the rentals that did not materialize according to their operational plan. They claim that the Mississauga property was operated in the same way as the Hull property and that, consequently, since the Minister agreed that the expenses claimed for the Hull property were deductible, the same conclusion should apply to the Mississauga property. We do not agree that the situation of the Mississauga property is equivalent to that of the Hull property.
[17] At the trial, the appellants argued that the Act is discriminatory and, more specifically, that subsection 248(1) is unconstitutional [TRANSLATION] "to the extent that it affects the interpretation of the other provisions relating to business expense deductions". The appellants' argument on this point in particular was not very clear. They seemed to claim that the definition of the term "personal or living expenses" stated in subsection 248(1) of the Act, applied in relation to paragraph 18(1)(h), establishes a distinction based on the personal characteristic of parental or family status, which, in their view, is discriminatory. They argued that [TRANSLATION] "the effect of the provision created by this section is that taxpayers who rent an immovable at the market price to persons who are related to them by blood are disallowed the deduction of legitimate expenses incurred in the operation of their business, which would otherwise be deductible for them."
B. Additional Expenses
[18] As to the additional expenses claimed by the appellants in their tax returns for the 1995 taxation year, the appellants argue that those expenses are deductible since they were incurred to generate net business income. In the appellants' view, they are entitled to deduct the expenses incurred in 1994 in their 1995 return. They submit that the Minister should have amended their tax return for 1994 to include the expenses in question as they had requested since he did not reply to them and deny them that request.
Analysis
Mississauga Property
[19] With respect to the Mississauga property, the respondent considers some of the expenses non-deductible, notwithstanding the fact that there is a determination that the appellants had a reasonable expectation of profit. However, other expenses incurred in respect of the Mississauga property are accepted as deductible if they were incurred for the purpose of gaining income.
[20] The Minister assessed the appellants on the basis that they had no reasonable expectation of profit. The assessment of the appellants is incorrect in view of the decision of the Supreme Court of Canada in Stewart, in paragraph 4, which states that the reasonable expectation of profit test is not a determining factor as to whether there is a source of income:
4 In our view, the reasonable expectation of profit analysis cannot be maintained as an independent source test. To do so would run contrary to the principle that courts should avoid judicial innovation and rule-making in tax law.
[21] At paragraph 50 in Stewart, the Supreme Court of Canada stated the test that should be applied in determining whether a source of income exists:
... As such, the following two-stage approach with respect to the source question can be employed:
(i) Is the activity of the taxpayer undertaken in pursuit of profit, or is it a personal endeavour?
(ii) If it is not a personal endeavour, is the source of the income a business or property?
The first stage of the test assesses the general question of whether or not a source of income exists; the second stage categorizes the source as either business or property.
[22] The appellants did not show that there was no personal element associated with the Mississauga property. Despite their plan to operate the Mississauga property as a rooming house, it was not disputed that, in 1993 and in the first three months of 1994, the only rent the appellants collected came from their son. No evidence was adduced that there was another tenant in 1993 from whom the appellants were unable to collect rent. Thus, notwithstanding the appellants' claims, their son appears to have had the benefit of using the entire house. Consequently, the furniture he purportedly provided and the housekeeping services he performed merely served his own needs. This shows that there was a personal element, in view of the fact that the son paid a rent of only $600.
[23] The fact that the appellants increased their son's rent to $1,100 a month in 1994 from the moment his financial situation had improved shows, in my view, that the house was not being operated as a rooming house. The appellant Carmelle Vachon admitted in her testimony that the rent increase had taken place in 1994 since the son had at the time more available resources to pay a higher rent. The Mississauga property appears to have been rented in accordance with the resources of the appellants' son. It appears undeniable that, from the moment their son paid $1,100, he was the only person to use the house and the appellants were not renting out individual rooms. This shows that there was no intention to operate the property as a rooming house. According to the appellants' projections, by renting the property for $1,100 a month, it was impossible to make a profit. Furthermore, the fact that the property was sold in 1994 when the son moved from the Mississauga area also reveals a personal element.
[24] At paragraphs 60 and 63 of the decision in Stewart, the Supreme Court of Canada then stated the following:
60 In summary, the issue of whether or not a taxpayer has a source of income is to be determined by looking at the commerciality of the activity in question. Where the activity contains no personal element and is clearly commercial, no further inquiry is necessary. Where the activity could be classified as a personal pursuit, then it must be determined whether or not the activity is being carried on in a sufficiently commercial manner to constitute a source of income.
...
63 Even if the appellant had made use of one or more of the properties for his personal benefit, the Minister would not be entitled to conclude that no business existed without further analysis. A taxpayer in such circumstances would have the opportunity to establish that his or her predominant intention was to make a profit from the activity and that the activity was carried out in accordance with objective standards of businesslike behaviour. Whether a reasonable expectation of profit existed may be a factor that is taken into consideration in that analysis.
[25] In view of the personal elements described above, the appellants did not have a bona fide commercial purpose for the Mississauga property. Furthermore, the Mississauga property was not operated on a commercial basis. This is clear from the fact that the decisions concerning the Mississauga property were made on the basis of the needs of the appellants' son, not for the purpose of making a profit. A serious businessman does not set rent in accordance with the tenant's ability to pay, as the appellants did. Consequently, the Mississauga property cannot be considered as a source of income from a business or property, and the appellants may not deduct expenses relating to that property.
Additional Miscellaneous Expenses
[26] The additional expenses deducted in 1995 are enumerated as follows in Schedule C of Exhibit A-5[2] filed by the appellants:
Office, car supplies, meetings, travel, accounting and telephone $11,067.56
CCA - computer 1990 $ 329.76
Computer upgrade - 1991 $ 787.66
Printer - 1991 $ 824.24
Facsimile - 1994 $ 659.38
CCA for 1994 computer, printer, fax $ 572.34
CCA for 1995 computer, printer, fax $ 447.88
$14,688.82
[27] The appellant Carmelle Vachon testified in cross-examination that approximately 97 percent of the $11,067.56 claimed in expenses appeared to represent expenses relating to the Mississauga property, such as travel costs incurred in 1995 for travel to Mississauga to attend to the maintenance of the house following its sale but prior to its delivery. The expenses connected to the Mississauga property are not deductible in view of the fact that that property was not a source of income from a business or property. Furthermore, in 1995, the appellants had already sold the Mississauga property and thus, in any case, could not deduct expenses incurred in 1995 in respect thereof. There is no evidence that those expenses were incurred for the property. Some of the expenses claimed in 1995 were generated in 1994 and, as a result, are not deductible.
[28] The rest of the amount of $11,067.56 represents expenses for travel to Hull to purchase the Hull property. The parties agreed that rental losses from the Hull property could be deducted. However, it must be made clear that the Hull property was a source of income from property, not a source of income from a business. A distinction must be drawn between expenses that may be deducted from business income and those that may be deducted from income from property. On the facts before me, the travelling expenses are not deductible from income from property.
[29] The rest of the expenses enumerated in Schedule C of Exhibit A-5 total $3,621.26. Some of those expenses are from years prior to 1995 and are therefore not deductible, whereas, for others, there is no evidence that they were incurred for the purpose of gaining income from the Hull property or Florida properties and therefore they are not deductible either.
Constitutional Argument
[30] The constitutional argument raised by the appellants is not valid. The appellants seem to contend that the deductions claimed in respect of the Mississauga property were disallowed because their son was the tenant. They claim that this constitutes discriminatory treatment, which is contrary to the Canadian Charter of Rights and Freedoms.
[31] No ground has been found that would make it possible to conclude that the provisions relevant to the instant appeals are invalid under subsection 15(1) of the Canadian Charter of Rights and Freedoms. In Law v. Canada (Minister of Employment and Immigration),[3] the Supreme Court of Canada outlined, at paragraph 39 of its judgment, the approach to take in examining a discrimination claim under subsection 15(1) of the Charter:
... Following upon the analysis in Andrews, supra, and the two-step framework set out in Egan, supra, and Miron, supra, among other cases, a court that is called upon to determine a discrimination claim under s. 15(1) should make the following three broad inquiries. First, does the impugned law (a) draw a formal distinction between the claimant and others on the basis of one or more personal characteristics, or (b) fail to take into account the claimant's already disadvantaged position within Canadian society resulting in substantively differential treatment between the claimant and others on the basis of one or more personal characteristics? If so, there is differential treatment for the purpose of s. 15(1). Second, was the claimant subject to differential treatment on the basis of one or more of the enumerated and analogous grounds? And third, does the differential treatment discriminate in a substantive sense, bringing into play the purpose of s. 15(1) of the Charter in remedying such ills as prejudice, stereotyping, and historical disadvantage? The second and third inquiries are concerned with whether the differential treatment constitutes discrimination in the substantive sense intended by s. 15(1).
[32] At paragraph 41, the Supreme Court of Canada then wrote as follows:
41 Since the beginning of its s. 15(1) jurisprudence, this Court has recognized that the existence of a conflict between an impugned law and the purpose of s. 15(1) is essential in order to found a discrimination claim. This principle holds true with respect to each element of a discrimination claim. The determination of whether legislation fails to take into account existing disadvantage, or whether a claimant falls within one or more of the enumerated and analogous grounds, or whether differential treatment may be said to constitute discrimination within the meaning of s. 15(1), must all be undertaken in a purposive and contextual manner.
[33] At paragraph 51 of its judgment, the Court expressed the purpose of subsection 15(1) of the Canadian Charter of Rights and Freedoms:
... It may be said that the purpose of s. 15(1) is to prevent the violation of essential human dignity and freedom through the imposition of disadvantage, stereotyping, or political or social prejudice, and to promote a society in which all persons enjoy equal recognition at law as human beings or as members of Canadian society, equally capable and equally deserving of concern, respect and consideration. Legislation which effects differential treatment between individuals or groups will violate this fundamental purpose where those who are subject to differential treatment fall within one or more enumerated or analogous grounds, and where the differential treatment reflects the stereotypical application of presumed group or personal characteristics, or otherwise has the effect of perpetuating or promoting the view that the individual is less capable, or less worthy of recognition or value as a human being or as a member of Canadian society. Alternatively, differential treatment will not likely constitute discrimination within the purpose of s. 15(1) where it does not violate the human dignity or freedom of a person or group in this way, and in particular where the differential treatment also assists in ameliorating the position of the disadvantaged within Canadian society.
[34] The provisions of the Act respecting the deductibility of expenses do not, as the appellants claim, create a differential treatment on the basis of family status, which is discriminatory. The fact that the appellants' son was a tenant of the Mississauga property is considered in the context of determining whether the property was used to make a profit and thus whether it was a source of income earned from a business or property. It is not the fact that the appellants rented the Mississauga property to their son that makes the expenses relating to that property non-deductible but rather the fact that the property was not operated commercially.
[35] The deductions claimed by the appellants in respect of the Mississauga property are not allowed since the property was not a source of income from a business or property. The expenses are not disallowed on the basis that they were personal expenses contemplated by paragraph 18(1)(h). The appellants claim, however, that the definition of "personal expenses" in the Act creates a differential treatment based on parental or family status. Under paragraph 18(1)(h), every person who earns business income is not entitled to deduct personal or living expenses, other than travelling expenses incurred in the course of carrying on his business while he is away from home. The definition of "personal or living expenses" stated in subsection 248(1) includes expenses relating to properties maintained by any taxpayer for the use or benefit of his children if those properties are not maintained with a reasonable expectation of earning a profit from the operation of a business. Paragraph 18(1)(h) does not create a differential treatment that is discriminatory since the expenses of property maintained by any taxpayer for the use or benefit of the taxpayer's children shall not be considered as personal expenses if those properties are maintained in the reasonable expectation of earning a profit from the operation of a business. The object and effect of the Act is to prevent the deduction of expenses that are not connected to a business of the taxpayer, not to penalize a taxpayer who does business with a member of his family. Consequently, there is no conflict with subsection 15(1) of the Charter.
[36] It is worth recalling the note of caution by the Supreme Court of Canada in Blencoe v. British Columbia (Human Rights Commission)[4] with respect to the Charter arguments, at paragraph 188:
188 We must remember though that s. 7 expresses some of the basic values of the Charter. It is certainly true that we must avoid collapsing the contents of the Charter and perhaps of Canadian law into a flexible and complex provision like s. 7. But its importance is such for the definition of substantive and procedural guarantees in Canadian law that it would be dangerous to freeze the development of this part of the law. The full impact of s. 7 will remain difficult to foresee and assess for a long while yet. Our Court should be alive to the need to safeguard a degree of flexibility in the interpretation and evolution of s. 7 of the Charter. At the same time, the Court should remind litigants that not every case can be reduced to a Charter case.
189 Assuming that the Charter must solve every legal problem would be a recipe for freezing and sterilizing the natural and necessary evolution of the common law and of the civil law in this country. In the present appeal, the absence of a Charter remedy does not mean that administrative law remedies could not have been identified and applied, as we have seen above.
[37] There is no valid ground in the circumstances of this appeal for resorting to the Charter.
[38] The Mississauga property was acquired to meet the personal needs of the appellants' son rather than to make a profit. That property was not commercial in nature. Consequently, the appellants are not entitled to deduct expenses relating to the Mississauga property.
[39] Furthermore, the appellants are not entitled to deduct the additional miscellaneous expenses enumerated in Schedule C of Exhibit A-5.
[40] The appeals for the years in issue are allowed, with costs if any, and the assessments are referred back to the Minister for reconsideration and reassessment on the basis that:
(a) the amount of $11,756.34 representing 50 percent of the expenses of $23,512.67; the amount of $11,516.17 representing 50 percent of the expenses of $23,032.34; and the amount of $10,515.81 (for Mrs. Vachon and $10,515.80 for Mr. Vachon) representing 50 percent of the expenses of $21,031.61 for the Florida condominiums are deductible for the 1993, 1994 and 1995 taxation years respectively;
(b) the amount of $5,598.96 representing 50 percent of the expenses of $11,197.93 for the Hull property is deductible for the 1995 taxation year.
The appellants are entitled to no other relief.
Signed at Ottawa, Canada, this 5th day of July 2002.
|
"Gerald J. Rip" |
J.T.C.C.
Translation certified true
on this 6th day of October 2003.
Sophie Debbané, Revisor
[1] 2002 SCC 46 (Q.L.).
[2] The appellants made a number of written changes to the amounts appearing in the statement of income and expenditure for the properties in issue included in Exhibit A-5. As a result, the figures in Exhibit A-5 do not coincide with those in the appellants' tax returns.
[3] [1999] 1 S.C.R. 497 (Q.L.).
[4] [2000] 2 S.C.R. 307 (Q.L.).