Any legal expenses to protect rights to obtain future income were not deductible

Tax – Income tax – Employment income

Taxpayer was judge for Municipal Court of Montreal. When taxpayer turned 70, he was obligated to retire under s. 39 of Act Respecting Municipal Courts of Quebec. At time of retirement, taxpayer was not entitled to full pension. Taxpayer brought application for declaration that s. 39 of Act was ultra vires. Superior Court dismissed taxpayer’s application. Taxpayer had incurred legal fees in amount of $132,145.00 for 2015 taxation year. Minister reassessed taxpayer for 2015 taxation year, and disallowed deductions for legal fees in amount of $132,145.00. Taxpayer appealed Minister’s assessment. Appeal dismissed. City of Montreal did not owe monies to taxpayer at time application was brought. Legal expenses were not incurred to obtain amounts for income that was owed. Any legal expenses to protect rights to obtain future income were not deductible. Since taxpayer sought to be reintegrated, he was not entitled to deduction for legal expenses incurred.

Clément v. La Reine (2020), 2020 CarswellNat 445, 2020 CCI 33, Dominique Lafleur J. (T.C.C. [Informal Procedure]).

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