6 September 1995 External T.I. 9518495 - MOVING EXPENSES

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 Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues:

Whether the selling costs in respect of a second residence, a cottage, qualify as moving expenses under section 62 of the Act.

Position TAKEN:

No.

Reasons FOR POSITION TAKEN:

Only selling expenses in respect of the sale of the "old residence" qualifies as a moving expense under paragraph 62(3)(e) of the Act. The old residence is the place where the taxpayer ordinarily resides, which in this case is the city residence.

		951849
XXXXXXXXXX	J.A. Szeszycki

September 6, 1995

Dear Sir:

Re: Moving Expenses

This is in reply to your letter of July 12, 1995 in which you requested our views on the qualification of costs related to the disposition of the cottage property as a moving expense, as that term is defined in subsection 62(3) of the Income Tax Act (the Act).

As we understand the situation presented in your letter, in the Spring of next year you expect to be relocating from XXXXXXXXXX. At the present time you reside at the address to which this response is being sent, which is a rented apartment in the city of XXXXXXXXXX. As a student, you reside there through much of the year but are able to spend the summer primarily at a cottage that is owned by you and located approximately 90 minutes from XXXXXXXXXX. As a consequence, at the time of your move you will have two residences from which you will be relocating.

Section 62 of the Act provides the authority and sets the rules for claims in respect of moving expenses. Paragraph 62(3)(e) of the Act, to which you referred, lists as a qualified moving expense the selling costs in respect of the old residence. The term "old residence" is one that was created in paragraph 62(1)(b) of the Act to take the place of a property described as "the residence in Canada at which, before the move, the taxpayer ordinarily resided".

The phrase "ordinarily resided" is a term that has been examined by the courts and in whose opinion it is that a person is ordinarily resident in the place where, in the settled routine of his or her life he or she regularly, normally or customarily lives. This would be contrasted to a place that is lived in occasionally.

From our understanding of the circumstances you describe, your XXXXXXXXXX apartment would be considered the place where you ordinarily reside and therefore the cost of selling the other residence, the cottage, would not be an expense described under subsection 62(3) of the Act as a qualifying moving expense.

We trust our comments will be of assistance to you.

Yours truly,

P.D. Fuoco
for Director
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch