Taxpayer had predominant intention to make profit

Tax court of Canada | Taxation

INCOME TAX

Taxpayer had predominant intention to make profit

Taxpayer had been sports journalist who had written sports blogs as part of his employment. After taxpayer’s employment ended in 2011, he started his own sports blog on professional website with view to obtaining advertisement revenue from sponsors. Taxpayer continued to travel to sports team’s games and deducted travel expenses. Taxpayer claimed no gross income and business loss of $26,540 in 2011, and gross income of $7,500 but net business loss of $33,366 in 2012. Minister of National Revenue denied taxpayer’s business losses on ground that taxpayer did not conduct any business activities. Taxpayer appealed. Appeals allowed. While there was commercial aspect of taxpayer’s venture, there was also personal element for sports fan to travel to watch sports team play and blog about it. Taxpayer had over 20 years’ experience as sportswriter but no experience in selling advertising or running media business. Taxpayer did nothing to solicit sponsors but was able to obtain one sponsor. While taxpayer’s intended course of action was poor business judgment, it was not so devoid of commercial reasoning to conclude venture was personal. Taxpayer did not provide evidence to assess venture’s capability to make profit. Given early stage of venture, it was found to go beyond hobby. Taxpayer had predominant intention to make profit and behaved in reasonable businesslike manner to pursue that end, while in start-up phase.
Berger v. R. (Jun. 19, 2015, T.C.C. [Informal Procedure], Campbell J. Miller J., File No. 2014-4251(IT)I) 254 A.C.W.S. (3d) 232.   

Free newsletter

Our daily newsletter is FREE and keeps you up to date on all the developments in the Ontario legal community. Please complete the form below and click on subscribe for daily newsletters from Law Times.

Recent articles & video

Ford government’s cuts to Toronto city council ruled constitutional

Histories of Canadian law and Métis people are entwined, says Jean Teillet

More women are on TSX company boards - but there’s slow progress to the C-Suite, says Osler

GM lawyer Michael Smith becomes partner at Bennett Jones

Ontario court rules cap on general damages does not apply to sexual abuse

House of Commons reveals legal fee reimbursement over $54k

Most Read Articles

Ontario court rules cap on general damages does not apply to sexual abuse

Man discharged from his fourth bankruptcy

Insurance lawyers reveal their referral philosophies

Court of Appeal rules auto insurer not liable for parental negligence claim stemming from accident