Couture,
C.J.T.C.:—The
appellant
who
lived
with
his
family
in
Rusagonis,
New
Brunswick
accepted
a
position
with
Revenue
Canada,
Taxation
in
Ottawa
in
December
1980.
He
immediately
listed
his
house
for
sale
with
a
real
estate
broker.
During
the
period
January
1981
to
June
1981
no
offer
to
purchase
was
received.
On
July
1st,
of
the
same
year
he
vacated
his
house
and
moved
to
Ottawa
to
assume
his
new
duties.
Finally,
in
December
1981,
he
accepted
an
offer
to
purchase.
The
closing
date
was
April
30,
1982,
as
provided
in
the
agreement
of
purchase
and
sale
dated
December
24,
1981,
duly
executed
by
all
the
parties,
and
filed
with
the
Court
as
an
exhibit.
The
agreement
provided
that
from
December
24,
1981
to
April
30,
1982
the
purchaser
would
occupy
the
house
in
return
for
a
monthly
rent
of
$360
in
addition
to
assuming
the
costs
of
heating
and
electicity.
The
agreement
also
provided
that
50
per
cent
of
the
rent
paid
would
be
applied
against
the
purchase
price
on
the
closing
date.
No
other
conditions
relevant
to
this
appeal
were
provided
in
the
agreement.
In
filing
his
tax
return
for
the
taxation
year
1981
the
appellant
claimed
a
rental
loss
of
$2,343.45
as
a
deduction
against
his
income
which
was
disallowed
by
the
respondent
in
assessing
the
return.
The
amount
of
$2,343.45
included
the
maintenance
costs
of
the
house
for
the
period
from
July
1
to
December
24,
1981,
that
is
from
the
date
on
which
he
alleged
that
his
intention
of
selling
his
house
had
been
superseded
with
an
intention
of
renting
it.
The
assessment
gave
rise
to
the
filing
of
a
notice
of
objection
by
the
appellant
and
subsequently
a
notice
of
appeal
to
this
Court
following
the
confirmation
of
the
assessment
by
the
respondent.
The
appellant
argued
before
the
Court
that
since
he
had
informed
his
real
estate
agent
in
July
1981
that
he
would
be
prepared
to
rent
his
house
if
a
sale
was
not
possible
because
the
real
estate
market
in
the
area
was
apparently
somewhat
depressed,
the
expenses
that
he
incurred
during
the
period
of
July
1,
1981
to
December
24
while
the
house
was
unoccupied
and
which
were
his
normal
maintenance
costs,
were
so
incurred
for
the
purpose
of
earning
income
from
property
and,
therefore,
deductible
in
computing
his
income.
He
claimed
that
the
fact
that
he
rented
his
house
between
December
1981
to
April
30,
1982
confirmed
that
he
had
intended
to
convert
his
house
into
an
income-earning
asset,
an
intention
he
formed
in
July
1981
after
his
house
had
been
for
sale
since
January
and
no
offer
had
been
received.
I
cannot
accept
the
appellant’s
proposition
that
after
July
1981
he
intended
to
rent
the
house
in
question.
What
he
intended
to
do
was
to
sell
the
house
but
if
this
was
not
feasible
then
he
would
rent
it.
In
answer
to
a
question
put
to
him
by
the
Court
he
clearly
expressed
his
intention
as
follows:
The
Court:
Well,
I
think
that
your
intentions
were
mixed.
You
wanted
to
either
rent
or
sell,
whatever
would
come
first.
The
Witness:
That
is
right.
For
the
first
six
months
of
1981,
I
would
say
my
main
intent
was
to
sell
my
home.
But
when
I
moved
from
my
home
in
Fredericton
on
July
1st
to
Ottawa,
I
would
accept
anything
that
came.
At
that
point
it
was
more
feasible
to
rent
the
home,
because
homes
were
not
moving
in
Fredericton
at
that
time.
Furthermore,
the
agreement
he
signed
in
December
1981
was
not
a
lease,
but
an
offer
to
purchase
containing
this
provision:
"This
transaction
of
purchase
and
sale
shall
be
completed
on
or
before
the
30th
day
of
April
1982.”
The
fact
that
the
purchaser
occupied
the
house
and
paid
rent
for
four
months
cannot
support
the
appellant’s
contention
that
his
maintenance
costs
from
July
1981
to
December
1981
were
incurred
for
the
purpose
of
earning
income
from
that
property.
The
real
and
substantial
purpose
of
incurring
these
costs
related
to
the
sale
of
the
property.
His
initial
and
primary
intention
was
to
dispose
of
his
house
from
the
time
he
accepted
a
position
in
Ottawa
in
late
1980,
and
none
of
the
evidence
adduced
before
the
Court
can
lead
to
another
conclusion.
For
these
reasons
the
appeal
is
dismissed.
Appeal
dismissed.
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