2000-2570(IT)I
BETWEEN:
ROBERT FULLER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeals heard on November 24, 2000 at Vancouver, British Columbia, by
the Honourable Judge D.W. Beaubier
Appearances
For the Appellant: The Appellant himself
Counsel for the Respondent: Kristy Foreman Gear
JUDGMENT
The appeals from the reassessments made under the Income Tax Act for the 1995 and 1996 taxation years are allowed, and the reassessments are referred back to the Minister of National Revenue for reconsideration and reassessment in accordance with the attached Reasons for Judgment.
Signed at Ottawa, Canada this 28th day of November, 2000.
|
"D.W. Beaubier" |
J.T.C.C.
Date: 20001128
Docket: 2000-2570(IT)I
BETWEEN:
ROBERT FULLER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Beaubier, J.T.C.C.
[1] This appeal pursuant to the Informal Procedure was heard at Vancouver, British Columbia on November 24, 2000. The Appellant was the only witness. He had appealed the disallowance of certain expenses claimed for 1995 and 1996 on account of the rental of a basement suite, consisting of 50% of the living area of his residence. He lived on the main floor of the residence in Vancouver.
[2] Paragraphs 6 to 9 inclusive of the Reply to the Notice of Appeal read:
6. By Notices of Reassessment dated July 20, 1998, the Minister disallowed $6,963.26 and $2,929.70 of the repairs and maintenance expenses claimed by the Appellant in 1995 and 1996, respectively (the "Disallowed Expenses") and disallowed the deduction claimed in respect of the Investment in the 1996 taxation year.
7. In so reassessing the Appellant, the Minister relied on the following assumptions of fact:
a) at all material times during the 1995 and 1996 taxation years, the Appellant owned a residence located at 3656 West 14th Avenue, Vancouver, B.C. (the "Residence");
b) the Residence was comprised of two floors with an area of 2400 feet per floor and the Appellant occupied the top floor as his personal residence and rented out the basement suite;
c) certain of the Disallowed Expenses consist of items such as painting the exterior of the property, the cost of maintaining the backyard, the cleaning of the exterior of the Residence and the cost of moss removal and gutter cleaning that would have been incurred by the Appellant regardless of whether a portion of the Residence was rented and therefore are personal and living expenses of the Appellant;
d) certain of the Disallowed Expenses, such as repairs to the outside of the property due to failed water membrane, are expenditures that create an asset or advantage of an enduring benefit and are therefore capital expenditures;
e) certain of the Disallowed Expenses are not supported by financial records kept by the Appellant and have not been established to have been incurred for the purpose of gaining or producing income from business or property;
f) capital cost allowance claimed by the Appellant and included in the Disallowed Expenses in respect of carpet, custom floor and washing machine is not supported by financial records kept by the Appellant and was not incurred in respect of property used for the purpose of gaining or producing income;
g) the Investment is not supported by financial records kept by the Appellant and the Appellant has not established that he made the Investment;
h) the Investment is not an expense incurred in respect of a business carried on by the Appellant during the 1996 taxation year and the Appellant did not incur a business loss in respect of the Investment; and
i) the Investment did not become a bad debt during the 1996 taxation year.
B. ISSUES TO BE DECIDED
8. The issues are:
a) whether the Minister has properly disallowed the Disallowed Expenses; and
b) whether the Appellant is entitled to a deduction from income in respect of the Investment.
C. STATUTORY PROVISIONS RELIED ON
9. He relies on paragraphs 18(1)(a), 18(1)(b), 18(1)(h), 20(1)(a) and 39(1)(c), subsections 50(1), 248(1) an 230(1) and Regulation 1102 of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), as amended (the "Act") for the 1995 and 1996 taxation years.
[3] At the opening of the hearing the Appellant withdrew his claim respecting the Investment.
[4] Assumptions 7(a), (b) and (d) were not refuted by the evidence. In particular, the Court finds that the expenditures relating to two repairs to the water membrane were of enduring value to the house and were capital, of which one-half relates to the tenancy.
[5] The Appellant also claimed the full cost of painting the exterior of the house consisting of $2,550 expended in 1995. This claim was not allowed. The Court finds that this was a normal expense associated with wear and tear of which 50% is deductible.
[6] The Appellant was allowed 50% of the lawn care expenses and of a hedge trimmer and that is all that he is entitled to. He claimed 50% of the gutter cleaning in the eavestroughs ($58.85) and that is awarded to him.
[7] The appeal is allowed to the extent described.
Signed at Ottawa, Canada this 28th day of November, 2000.
|
"D.W. Beaubier" |
J.T.C.C.
COURT FILE NO.: 2000-2570(IT)I
STYLE OF CAUSE: Robert Fuller v. Her Majesty the Queen
PLACE OF HEARING: Vancouver, British Columbia
DATE OF HEARING: November 24, 2000
REASONS FOR JUDGMENT BY: The Honourable D.W. Beaubier
DATE OF JUDGMENT: November 28, 2000
APPEARANCES:
Counsel for the Appellant:
Counsel for the Respondent: Kristy Foreman Gear
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the Respondent: Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada