2000-2570(IT)I
BETWEEN:
ROBERT FULLER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeals heard on November 24, 2000 at Vancouver,
British Columbia, by
the Honourable Judge D.W. Beaubier
Appearances
For the
Appellant:
The Appellant himself
Counsel for the
Respondent:
Kristy Foreman Gear
JUDGMENT
The
appeals from the reassessments made under the Income Tax
Act for the 1995 and 1996 taxation years are allowed, and the
reassessments are referred back to the Minister of National
Revenue for reconsideration and reassessment in accordance with
the attached Reasons for Judgment.
Signed at Ottawa, Canada this 28th day of November,
2000.
J.T.C.C.
Date: 20001128
Docket: 2000-2570(IT)I
BETWEEN:
ROBERT FULLER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Beaubier, J.T.C.C.
[1] This appeal pursuant to the
Informal Procedure was heard at Vancouver, British Columbia on
November 24, 2000. The Appellant was the only witness. He had
appealed the disallowance of certain expenses claimed for 1995
and 1996 on account of the rental of a basement suite, consisting
of 50% of the living area of his residence. He lived on the main
floor of the residence in Vancouver.
[2] Paragraphs 6 to 9 inclusive of the
Reply to the Notice of Appeal read:
6. By Notices
of Reassessment dated July 20, 1998, the Minister disallowed
$6,963.26 and $2,929.70 of the repairs and maintenance expenses
claimed by the Appellant in 1995 and 1996, respectively (the
"Disallowed Expenses") and disallowed the deduction
claimed in respect of the Investment in the 1996 taxation
year.
7. In so
reassessing the Appellant, the Minister relied on the following
assumptions of fact:
a) at all
material times during the 1995 and 1996 taxation years, the
Appellant owned a residence located at 3656 West 14th
Avenue, Vancouver, B.C. (the "Residence");
b) the
Residence was comprised of two floors with an area of 2400 feet
per floor and the Appellant occupied the top floor as his
personal residence and rented out the basement suite;
c) certain of
the Disallowed Expenses consist of items such as painting the
exterior of the property, the cost of maintaining the backyard,
the cleaning of the exterior of the Residence and the cost of
moss removal and gutter cleaning that would have been incurred by
the Appellant regardless of whether a portion of the Residence
was rented and therefore are personal and living expenses of the
Appellant;
d) certain of
the Disallowed Expenses, such as repairs to the outside of the
property due to failed water membrane, are expenditures that
create an asset or advantage of an enduring benefit and are
therefore capital expenditures;
e) certain of
the Disallowed Expenses are not supported by financial records
kept by the Appellant and have not been established to have been
incurred for the purpose of gaining or producing income from
business or property;
f)
capital cost allowance claimed by the Appellant and included in
the Disallowed Expenses in respect of carpet, custom floor and
washing machine is not supported by financial records kept by the
Appellant and was not incurred in respect of property used for
the purpose of gaining or producing income;
g) the
Investment is not supported by financial records kept by the
Appellant and the Appellant has not established that he made the
Investment;
h) the
Investment is not an expense incurred in respect of a business
carried on by the Appellant during the 1996 taxation year and the
Appellant did not incur a business loss in respect of the
Investment; and
i) the
Investment did not become a bad debt during the 1996 taxation
year.
B. ISSUES
TO BE DECIDED
8. The issues
are:
a) whether the
Minister has properly disallowed the Disallowed Expenses; and
b) whether the
Appellant is entitled to a deduction from income in respect of
the Investment.
C.
STATUTORY PROVISIONS RELIED ON
9. He relies
on paragraphs 18(1)(a), 18(1)(b), 18(1)(h), 20(1)(a) and
39(1)(c), subsections 50(1), 248(1) an 230(1) and Regulation 1102
of the Income Tax Act, R.S.C. 1985, c. 1 (5th
Supp.), as amended (the "Act") for the 1995 and
1996 taxation years.
[3] At the opening of the hearing the
Appellant withdrew his claim respecting the Investment.
[4] Assumptions 7(a), (b) and (d) were
not refuted by the evidence. In particular, the Court finds that
the expenditures relating to two repairs to the water membrane
were of enduring value to the house and were capital, of which
one-half relates to the tenancy.
[5] The Appellant also claimed the
full cost of painting the exterior of the house consisting of
$2,550 expended in 1995. This claim was not allowed. The Court
finds that this was a normal expense associated with wear and
tear of which 50% is deductible.
[6] The Appellant was allowed 50% of
the lawn care expenses and of a hedge trimmer and that is all
that he is entitled to. He claimed 50% of the gutter cleaning in
the eavestroughs ($58.85) and that is awarded to him.
[7] The appeal is allowed to the
extent described.
Signed at Ottawa, Canada this 28th day of November,
2000.
J.T.C.C.
COURT FILE
NO.:
2000-2570(IT)I
STYLE OF
CAUSE:
Robert Fuller v. Her Majesty the Queen
PLACE OF
HEARING:
Vancouver, British Columbia
DATE OF
HEARING:
November 24, 2000
REASONS FOR JUDGMENT BY: The Honourable D.W.
Beaubier
DATE OF
JUDGMENT:
November 28, 2000
APPEARANCES:
Counsel for the
Appellant:
Counsel for the Respondent: Kristy
Foreman Gear
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the
Respondent:
Morris Rosenberg
Deputy Attorney General of Canada
Ottawa, Canada
Email this Content