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“personal or living expenses” includes (a) the expenses of properties maintained by any person for the use or benefit of the taxpayer or any person connected with the taxpayer by blood relationship, marriage or adoption, and not maintained in connection with a business carried on for profit or with a reasonable expectation of profit, 4.02. ...

Certain instances when he acted decisively and directly in connection with his work as well as some indication of the investigative reporting and jornalism which he initiated on his own, were cited as examples of such independence. ...

Dealing firstly with subparagraph 8(l)(f)(i), (and I will paraphrase), certain expenses are deductible (by the taxpayer) where they are incurred in connection with the selling of property for his employer and where under the contract of employment the employee was required to pay his own expenses. ...

Mr Denis Lessard, a Department of National Revenue auditor since 1974, stated that he had begun auditing the appellant’s hotel accounts in 1980 in connection with a disposition by the appellant of one of his properties. ...

The business, as indicated, had been terminated and the carrying charges from the financial obligations incurred in connection therewith, could not be redirected and deducted from other income, such as employment income. ...

They read as follows: 18. (1) In computing the income of a taxpayer from a business or property no deduction shall be made in respect of (h) personal or living expenses of the taxpayer except travelling expenses (including the entire amount expended for meals and lodging) incurred by the taxpayer while away from home in the course of carrying on his business; 248. (1) In this Act, “personal or living expenses” includes (a) the expenses of properties maintained by any person for the use or benefit of the taxpayer or any person connected with the taxpayer by blood relationship, marriage or adoption, and not maintained in connection with a business carried on for profit or with a reasonable expectation of profit, (b) the expenses, premiums or other costs of a policy of insurance, annuity contract or other like contract if the proceeds of the policy or contract are payable to or for the benefit of the taxpayer or a person connected with him by blood relationship, marriage or adoption, and (c) expenses of properties maintained by an estate or trust for the benefit of the taxpayer as one of the beneficiaries; 4.02 Analysis 4.02.1 The crux of the matter is whether there was a reasonable expectation of profit in the appellant’s research and writing activity during the years 1977 to 1980 inclusive. ...

In connection with the primary argument counsel referred to a number of cases including the decision of the Exchequer Court in Trans-Prairie Pipelines, Ltd v MNR, [1970] CTC 537; 70 DTC 6351, as authority for the proposition that an expense may be regarded as incurred for the purpose of gaining or producing income from a business or property even though it is not possible to trace the expenditure directly to a precise dollar of income earned. ...

In connection with the scheme the appellant entered into an agreement with the Crown in Right of Canada represented by the Minister of State for Urban Affairs. ...

In assessing tax as aforesaid, the Respondent relied, inter alia, upon the following findings or assumptions of fact: (a) the Appellant during the period under appeal was employed as a teacher and was also a municipal officer of the corporation of the Town of Dunnville; (b) in 1964 the Appellant purchased 53 acres of land in Dunnville and in 1965 he purchased an adjoining 45 acres of land to give him a total of 98 acres of land (hereinafter) referred to as the “farm”); (c) in 1969 the Appellant sold 30 acres of the farm land; (d) the Appellant has never made a profit from the operation of the farm and has reported the following gross revenue, expenses and losses resulting from the operation of the farm: Year Gross Revenue Expenses Losses 1980 $1,332.75 $8,142.18 $6,809.43 1979 1,319.50 8,608.70 7,289.20 1978 1,098.50 8,598.50 7,500.00 1977 1,120.70 7,946.44 6,825.74 1976 (not available) — — 1975 635.72 3,489.59 2,853.87 1974 398.00 1,939.35 1,541.35 1973 350.00 1,325.57 1,024.43 1972 397.91 1,450.53 1,052.00 1971 nil 1,489.70 1,489.70 1970 nil 1,801.35 1,801.35 1969 nil 3,178.89 3,170.89 (sic) 1968 5,132.72 7,071.55 1,938.83 1967 2,036.65 6,801.37 4,764.72 1966 4,231.54 4,874.78 643.24; (e) during the period under appeal the Appellant used approximately three acres of the farm land to grow vegetables for the personal consumption of the family, the remainder of the land was rented out to another farmer under a share-crop agreement; under the terms of the share-cropping agreement, the Appellant’s share was limited to a maximum of approximately $2,000,00, but has never exceeded $1,200.00; (f) the Appellant was not during the period under appeal carrying on a farming operation with a reasonable expectation of profit; (g) the expenses deducted by the appellant from farm revenue which caused the losses were not incurred for the purpose of gaining or producing income from a business or property but were the expenses of property maintained by the Appellant for the use of his family and not maintained in connection with a business carried on for profit or with a reasonable expectation of profit. ...

Attached and marked Exhibit “A” is a photocopy of my solicitors reporting letter in connection with the said purchase. ...