Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
ISSUE: In 1997, the individual lived in a house owned by his employer. When he lost his job, he was evicted from the house and moved to a new residence that was less than 40 kilometres away from the old residence. The individual indicates that he has not found employment in his vocation but it is not clear if the individual is still unemployed. Are the moving expenses incurred as a result of the move from the old residence to the new residence deductible under subsection 62(1)?
Position:
It is a question of fact but it appears from the limited information available that the individual is not entitled to deduct moving expenses.
Reasons:
The conditions in section 62 are not met. The individual did not move to start a job or business or to begin full-time attendance at an educational institution. In addition, it appears that the taxpayer is still unemployed and therefore has no income from employment at a new work location. Lastly, it appears that the move did not result in the taxpayer living at least 40 kilometres closer to a new work location.
August 27, 1998
Mr. Richard Gendron HEADQUARTERS
Manager G. Moore
Ministerial Correspondence Division 952-1506
Client Services Directorate
Attention: Joao Melo
7-982151
XXXXXXXXXX
In response to your request of August 18, 1998, we are providing you with the following insert to be included in reply to a query raised by the above-noted taxpayer regarding moving expenses:
“The Income Tax Act provides that certain moving expenses incurred by an individual are deductible when calculating income for the year. The conditions and limitations in the Act regarding the moving expenses deduction are explained in the enclosed copy of Interpretation Bulletin IT-178R3, Moving Expenses. An individual who changes residences to commence employment at a new work location, commence carrying on a business at a new work location, or commence full-time attendance at a post-secondary educational institution may be able to deduct eligible moving expenses incurred in moving from the old residence to the new residence provided the move results in the individual living at least 40 kilometres closer to the new work location or educational institution. It is a question of fact whether an employee’s move arises as a result of a change in work location. In addition, in the case of an individual who moved to commence employment or a business at a new work location, the eligible moving expenses must be first deducted in the year of the move and the amount claimed cannot be more than the income earned from employment or self-employment at the new work location. Any excess may be carried forward and deducted, but only in the year following the year of the move and only to the extent of such income earned at the new work location. The rules regarding individuals who move to commence full-time attendance at a post-secondary educational institution are in paragraphs 5 to 11 of IT-178R3.
In your letter, you indicate that you lived in a house owned by your employer. In 1997, when you lost your job, you were evicted and had to move to a new residence. You have indicated that your new residence is less than 40 kilometres from your old residence and that you are still not employed in your vocation. Since it appears that the reason for your move was not to commence carrying on a business or employment at a new work location, you would not be entitled to deduct moving expenses incurred in respect of your move. Furthermore, it appears that, based on the information available in your letter, you did not have any employment income or self-employment income from a new work location in 1997 or, to date, in 1998. In addition, it appears that you do not meet the condition that the move must result in you living at least 40 kilometres closer to a new work location.”
J. Wilson
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1998
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1998