D
E
Taylor:
[Translation]—This
appeal,
which
was
heard
in
Montreal
(Quebec)
on
June
13,
1980,
was
brought
following
an
assessment
for
the
year
1973
in
which
the
Minister
of
National
Revenue
refused
to
allow
a
deduction
of
$9,833.89
claimed
by
the
taxpayer
as
a
loss
incurred
in
the
exercise
of
his
profession
of
chartered
accountant
as
follows:
ROCH
A
CHOINIERE
STATEMENT
OF
INCOME
AND
EXPENDITURES
FOR
THE
TWELVE
MONTHS
ENDING
OCTOBER
31,
1973
Income:
Furthermore,
the
appellant
informed
the
Board
at
the
hearing
that
he
wished
to
claim
an
additional
deduction
of
$4,193.18
for
profits
which
had
come
to
him
from
two
estates
and
which
he
had
included
in
his
amended
1973
tax
return.
The
statement
of
income
and
expenditures
for
these
estates
reads
as
follows:
|
Fees
|
$1,107.95
|
|
|
Knight
(378-3939)
|
5,000.00
|
$6,107.95
|
|
Expenditures:
|
|
|
Wages
|
441.91
|
|
|
Collection
costs
|
1,421.00
|
|
|
Representation
expenses
|
70.15
|
|
|
Automobile
expenses
|
2,060.94
|
|
|
Travel
expenses
|
177.20
|
|
|
Advertising
and
publicity
|
9.74
|
|
|
Rent
|
2,058.66
|
|
|
Telephone
|
515.24
|
|
|
Stamps
and
stationery
|
223.50
|
|
|
Office
expenses
|
1,098.42
|
|
|
Books
and
magazines
|
459.08
|
|
|
Electricity
|
244.65
|
|
|
Legal
and
professional
fees
|
1,554.00
|
|
|
Dues
and
membership
fees
|
50.00
|
|
|
Interest
and
bank
charges
|
2,056.69
|
|
|
Maintenance
and
repairs
|
204.70
|
|
|
Miscellaneous
expenses
|
2,605.36
|
|
|
Moving
|
85.00
|
|
|
Bad
debts
|
605.60
|
$15,941.84
|
|
Net
loss
before
depreciation
|
|
$
(9,833.89)
|
ESTATE
OF
A
LAROSE
AND
J
CHOINIERE
STATEMENT
OF
INCOME
AND
EXPENDITURES
FOR
THE
YEAR
ENDED
OCTOBER
31,
1973
Income:
|
Interest
|
$11,876.26
|
|
|
Rent
|
8,459.00
|
$20,335.26
|
|
Expenditures:
|
|
|
General
upkeep
of
the
houses
|
939.32
|
|
|
Electricity
and
heating
|
504.81
|
|
|
Plumbing
|
125.00
|
|
|
Tithes
and
repairs
|
156.53
|
|
|
Property
and
education
taxes
|
4,729.52
|
|
|
Insurance
|
914.95
|
|
|
Legal
and
professional
fees
|
1,800.00
|
|
|
Advertising
and
publicity
|
9.60
|
|
|
Collection
costs
|
757.25
|
9,936.98
|
|
NET
PROFIT
(BEFORE
DEPRECIATION)
|
|
$10,398.28
|
The
appellant
therefore
asked
the
Board
to
reduce
the
net
profit
to
$6,205.10
($10,398.28
-
$4,193.18)
in
view
of
the
fact
that
he
had
paid
this
amount
of
$4,193.18
in
interest.
With
respect
to
this
subject
he
made
the
following
statement
at
the
hearing:
I
recently
discovered
a
federal
tax
bulletin
stipulating
that
if
a
person
has
not
borrowed
money
to
pay
the
interest
on
any
amounts
payable
as
federal
estate
taxes,
then
he
may
deduct
these
amounts
from
his
income.
.
.
.
the
real
amount
that
the
estate
section
charged
me
was
$2,867.87
for
one
estate
and
$1,325.31
for
the
other
one
.
.
.
With
regard
to
the
interest
in
question,
counsel
for
the
respondent
stated:
.
.
.
Mr
Choinière
has
enclosed
a
statement
of
income
and
expenditures
.
.
.
However,
this
statement
was
not
verified
and
there
is
therefore
nothing
to
show
that
the
amounts
being
claimed
today
are
not
duplicating
the
amounts
already
claimed
here.
The
appellant’s
testimony
regarding
his
activities
in
1973
is
confused
and
contradictory
and
does
not
support
the
conclusion
that
he
was
operating
a
business
from
which
he
derived
an
income.
Furthermore,
though
the
taxpayer
is
a
chartered
accountant,
he
has
not
succeeded
in
demonstrating
to
the
Board
that
the
“expenditures”
were
not
applied
to
his
own
personal
needs.
As
far
as
the
additional
deduction
of
$4,193.18
is
concerned,
I
agree
with
counsel
for
the
respondent
that
the
appellant
had
to
prove
beyond
any
doubt
that
the
new
amounts
($2,867.87
and
$1,325.31)
had
not
already
been
included
in
the
financial
statement
as
expenditures,
something
which
the
appellant
did
not
attempt
to
do
For
these
reasons,
the
appeal
is
dismissed.
Appeal
dismissed.
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