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Citation: 2004TCC398
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Date: 20040608
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Docket: 2003-2718(IT)I
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BETWEEN:
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JERRY ROTTLUFF,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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REASONS FOR JUDGMENT
Little J.
A. FACTS:
[1] In the relevant years the
Appellant was employed as a retail clerk by Canada Safeway Ltd.
in a retail store located at 1033 Austin Avenue, Coquitlam,
British Columbia.
[2] In September 1996 the Appellant
and his spouse sold their home in Aldergrove, British Columbia
and moved their personal possessions to a rented storage facility
located at Scotch Creek, British Columbia.
[3] After the family home was sold the
Appellant, his spouse and their two children lived in the
basement of a house owned by Don and Laura Clark in Langley,
British Columbia. Don and Laura Clark are the parents of the
Appellant's spouse.
[4] In the fall of 1996 the Appellant
and his spouse purchased a house in Celista, British Columbia.
Celista is located between Salmon Arm and Chase, in the Province
of British Columbia.
[5] In March 1997, the Appellant, his
spouse and their children moved to the house located in Celista.
The Appellant also moved the family's personal possessions
from the storage facility in Scotch Creek to the house located in
Celista.
[6] The Appellant testified that he
attempted to have his employer, Canada Safeway Ltd., transfer him
to one of their retail stores either in Salmon Arm or Kamloops
but he was unsuccessful.
[7] The Appellant enrolled in a real
estate course at the University of British Columbia and on
April 3, 2000 qualified as a Property Manager
(Exhibit A-7).
[8] In April 2001, the Appellant was
retained as a property manager by Century 21 Lakeside Resort Ltd.
("Century 21") in Celista.
[9] The Appellant resigned as a
property manager for Century 21 in September 2001 and
returned to his employment position at Canada Safeway Ltd. in the
Coquitlam store.
[10] The Appellant said that from April 1997
to the present time his wife and their two children have
continuously lived in their home in Celista. The Appellant also
stated that he has worked continuously with Canada Safeway except
for the several months in 1991 when he was retained as a property
manager by Century 21.
[11] The Appellant said that after his wife
and children moved to the Celista home in April 1997, he lived
with his in-laws in Aldergrove. The Appellant said that he would
usually commute to Celista every 10 days, stay in Celista with
his wife and children for four days and then return to the
in-law's house in Langley.
[12] The Appellant incurred moving expenses
in the amount of $4,547.00 in 1997 in connection with the move of
his family to Celista.
[13] When the Appellant filed his income tax
return for the 2001 taxation year he deducted moving expenses in
the amount of $4,547.00.
[14] The Appellant's wife incurred
moving expenses in the amount of $13,891.00 in 1997. The
Appellant's wife claimed and was allowed to deduct moving
expenses of $13,891.00 in determining her income for the 1998
taxation year (the Appellant's wife had no income in the 1997
taxation year and the moving expenses were carried forward to the
1998 taxation year).
B. ISSUE:
[15] The issue is whether the Appellant is
entitled to deduct moving expenses in the amount of $4,547.00
that he paid in 1996 and 1997 in determining his income for the
2001 taxation year.
C. ANALYSIS:
[16] Subsection 62(1) of the Income Tax
Act (the "Act") permits a taxpayer who moves
from one residence in Canada to another residence in Canada to
deduct certain moving expenses if the move is made in connection
with the commencement of a business or employment at a particular
location in Canada. The taxpayer's new residence must be at
least 40 kilometres closer to the new place of employment or
place of business.
[17] The moving expenses are only deductible
to the extent of the taxpayer's business or employment income
at the new location.
[18] Moving expenses of a taxpayer may be
deducted in the year of the move or, if they cannot be deducted
in the year of the move, the expenses may be deducted in the
following taxation year.
[19] It is clear from the words of the
Act that in order to deduct moving expenses a taxpayer
must commence to be employed at the new location in Canada.
[20] The Appellant maintains that he should
be allowed to deduct the moving expense of $4,547.00 that he paid
in 1996 and 1997 in determining his income for the
2001 taxation year because he accepted employment with
Century 21 as a property manager at Celista in 2001.
[21] In my opinion the Appellant cannot come
within the words of the Act because all of the moving
expenses claimed were paid in 1996 and 1997, i.e. some four
to five years before he obtained a position with Century 21.
[22] I have concluded that the Minister of
National Revenue correctly disallowed the deduction of the
expenses claimed by the Appellant in the 2001 taxation year
because the expenses that were claimed were not incurred in the
2001 taxation year or the preceding year as required by section
62 of the Act.
[23] The appeal is dismissed without
costs.
Signed at Vancouver, British Columbia, this 8th day of June
2004.
Little J.
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