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.
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Dear Madam:
RE: Travel Expenses - Rental Property
This is in reply to your letter of November 10, 1993 in which you asked us whether you are entitled to deduct vehicle expenses which you incur in connection with a rental property.
In relation to the information set out below, you have indicated that
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Our Comments:
Since you have made a reference in your letter to the "Rental Income Tax Guide" issued by this Department, and this guide, as indicated on page 4 is applicable to rental properties from which property income rather than business income is earned, we have presumed that your rental property involves property income.
Pursuant to court decisions, travelling expenses normally are not allowable deductions where the expenses relate to the earning of income from a rental property. Nonetheless, as indicated on page 9 in the "Rental Income Tax Guide", the Department is prepared to allow motor vehicle expenses in certain circumstances. In this regard, an individual who owns only one rental property may deduct reasonable motor vehicle expenses if the following conditions are satisfied:
(a) the rental property is located in the general area where the individual lives;
(b) the individual does part, or all of the necessary repairs and maintenance on the property;
(c) the individual incurs the motor vehicle expenses to transport tools and materials to the rental property.
With respect to the above requirements, you have referred to the phrase "the general area where you live" in (a) above in relation to your situation.
On the basis that it takes approximately 25 minutes to travel from the rural location of your residence to the rental property, we do not regard the rental property in XXXXXXXXXX to be located within the general area where you live. In addition, it seems apparent that other towns are closer to your residence.
While we regret that our reply could not have been favourable, we hope that our comments will be of assistance to you.
Yours truly,
P.D. Fuoco for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
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© Her Majesty the Queen in Right of Canada, 1993
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© Sa Majesté la Reine du Chef du Canada, 1993
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