24 February 1998 External T.I. 9800495 - CARING FOR DISABLED ADULTS AS A BUSINESS

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: Is caring for disabled adults a business?

Position: Unable to confirm

Reasons: Definition of a business

XXXXXXXXXX 980049
C. Tremblay

February 24, 1998

Dear Madam:

Re: Caring for Disabled Adults as a business

This is in reply to your letter of January 5, 1998, wherein you request a ruling on whether caring for a disabled person in your home would constitute a business.

We are unable to rule on whether or not a particular activity is a business since the determination is dependent on the particular facts of the situation which cannot be fully established at the time of the request and may, in any case, vary from time to time. We are, however, able to provide you with some general comments.

For income tax purposes, "business" is defined, in part, as including a profession, calling, trade, manufacture or undertaking of any kind whatever but does not include an office or employment. Generally, business activities include any activity which is carried on for profit or with a reasonable expectation of profit.

Accordingly, whether or not caring for disabled persons in your home can be carried on with a reasonable expectation of profit and to a level that would constitute a business is a question of fact. Still, the following criteria should be considered; the profit or loss experience in prior years, the training or experience in that activity, the intended course of action, and the capability of the activity to show a profit. In our view, a business implies a degree of organisation, its aim the realisation of a profit. Since social assistance payments received for being a foster parent or caring for a disabled adult do not have to be included in income, it would appear that such an activity would not be considered a business carried on with a reasonable expectation of profit.

The foregoing represents our general views with respect to the subject matter of your letter, however, the facts of a particular situation may result in a different conclusion. As indicated, these opinions are not rulings and in accordance with the guidelines set forth in Information Circular 70-6R3, they are not binding on the Department

We trust our comments are of assistance.

Yours truly,

for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Division
Policy and Legislation Branch