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.
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
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