Génier v. The Queen, 2011 DTC 1058 [at at 317], 2011 TCC 641

The taxpayer ceased regular operation of her retirement home business, and took five years to sell the property. She deducted related expenses for that period, including interest, property taxes and utilities. In allowing the deduction of these expenses, Boyle J. remarked at para. 29:

It is simply incontrovertible that the general rule is that business closing costs are deductible business expenses.

And at para. 32:

Once it is established that [taxpayers'] business or investment activity is a source of income from a business or property, their risk/reward analysis, risk tolerance, judgment and decisions are not generally open to be challenged by the CRA... .

The taxpayer's retirement home business failed. Even though she was actively trying to sell the property (listing with several different realtors, attempting private sale, continually adjusting asking price and so forth), it took her five years to sell. She deducted her expenses connected with the property, including interest, property taxes and utilities. The Minister argued that the taxpayer's high initial asking price, and the fact that the property was unlisted for long periods (in which she pursued private sales), demonstrated that she was not pursuing the sale in a reasonable manner. Boyle J. allowed the deductions, noting at para. 32:

Mrs. Génier may have made some business mistakes but those were her mistakes to make. Many Canadian businesses have exercised what Monday morning and armchair quarterbacks say was poor business judgment and lost large amounts of money, including banks and other financial institutions, natural resource companies and real estate development companies. Some with names like Eaton, Campeau, and Massey lost their business as a result. Their tax losses were not denied as a result of arguably poor business decisions. It can be no different for the Géniers of Canada.