Pearen v. The Queen, 2014 TCC 294 (Informal Procedure)

Docket: 2014-692(IT)I

BETWEEN:

Scott Pearen,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

Appeal heard on September 11, 2014, at Vancouver, British Columbia.

Before: The Honourable Justice Lucie Lamarre

Appearances:

JUDGMENT

          The appeal from the reassessment made under the Income Tax Act for the 2012 taxation year is allowed to take into account the amounts conceded by the respondent at the hearing. The appellant is entitled to claim a credit for medical expenses totalling $10,524.

Signed at Ottawa, Canada, this 1^st day of October 2014.

“Lucie Lamarre”

Citation: 2014 TCC 294

Date: 20141001

Docket: 2014-692(IT)I

BETWEEN:

Scott Pearen,

Appellant,

and

HER MAJESTY THE QUEEN,

Respondent.

REASONS FOR JUDGMENT

Lamarre J.

[1]             The appellant claimed a medical expense tax credit for medical expenses totalling $29,220 incurred during his 2012 taxation year.

[2]             Of that total amount, $26,869.30 was an amount paid to SCI Healthcare (SCI) for a procedure to implant a surrogate with an embryo (a donated egg fertilized by the appellant) with the intent to create a child.

[3]             SCI was located in India and the appellant also claimed costs of $1,364.48 for travel to India and a total of $408 for meals during his 8-day stay in India. He explained that he had to go to India to undergo medical procedures related to the surrogacy treatment.

[4]             He filed as Exhibit A-1 the breakdown of his expenses paid for the services of SCI. He explained that the in-vitro and embryology services provided were related to in-vitro fertilization in which he was personally involved, as his sperm was used in the creating of the embryo to be implanted in the surrogate mother.

[5]             The respondent conceded in court that those expenses (totalling $8,173 CDN) and the travel expenses incurred to go to India for the treatment (travel $1,364, meals $408) were deductible pursuant to paragraphs 118.2(2)(g), (h) and (o) of the Income Tax Act (ITA). Further, as a consequence of that concession, the eligible medical expenses with respect to his optical costs in the amount of $579.15, which had initially been refused, were accepted, as the total medical expenses exceeded 3% of the appellant’s income for the year, which is a condition that must be met under subsection 118.2(1) of the ITA.

[6]             The balance of the expenses disallowed were those paid for the surrogate mother.

[7]             For the reasons set out in the case of Todd Edward Zanatta (2014‑562(IT)I) heard before me on the same day as the present case and in which the same arguments were made, I agree with the respondent that none of the expenses related to the surrogate mother are deductible pursuant to paragraph 118.2(2)(a) of the ITA.

[8]             The appeal is therefore allowed to take into account the amounts conceded by the respondent at the hearing. The appellant is entitled to claim a credit for medical expenses totalling $10,524 ($8,173 + $1,364 + $408 + $579).

Signed at Ottawa, Canada, this 1^st day of October 2014.

“Lucie Lamarre”

APPEARANCES:

COUNSEL OF RECORD:

For the Appellant: