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 CCRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.
Principal Issues: Eligibility as moving expenses of (a) deposit lost on the purchase of a residence; (b) deposit required by utilities service providers; (c) cost of connecting and disconnecting utilities.
Position: Deposits in (a) and (b) are not eligible moving expenses. The costs of connecting and disconnecting utilities in (c) qualify as moving expenses.
Reasons: Definition of "moving expense" in ITA 62(3).
February 25, 2003
Winnipeg Tax Services Office HEADQUARTERS
Client Services S. Parnanzone
Tel: (613) 957-2133
Attention: Mr. Jeff Mills
As a result of a recent telephone conversation with a staff member of the office of Mr. B. Cook, Director-Taxation of the Winnipeg Tax Services Office, we are forwarding the letter of February 1, 2003, from XXXXXXXXXX for your review and appropriate action.
The taxpayer moved from Manitoba to Alberta as a result of changing work location with the same employer. According to the taxpayer, it appears that the Canada Customs and Revenue Agency disallowed certain moving expenses and the taxpayer would like certain clarifications as to why the expenses were disallowed.
We are unable to provide clear guidance concerning the resolution of the taxpayer's tax problem due to the paucity of facts in the taxpayer's letter. Nevertheless, we will make the general comments set out below, on the assumption that the taxpayer's move qualifies as an "eligible relocation," as this expression is defined in subsection 248(1) of the Income Tax Act ("Act"). The loss of a deposit on the purchase of a residence is not an eligible expense because it does not meet the definition of "moving expense" in subsection 62(3) of the Act. Deposits paid to utilities providers also do not qualify as moving expenses. However, the costs of connecting or disconnecting utilities are eligible moving expenses because they are listed in paragraph 62(3)(h) of the Act.
Whether the taxpayer actually incurred the expenses claimed, as substantiated by receipts or other reasonableness tests, is a question of fact that is better resolved by the verification and audit functions of your office.
If you have any questions, please call the writer.
Milled Azzi, CA
Business and Partnerships Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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