John B Goetz:—This is an appeal by the appellant with respect to an assessment concerning his 1977 taxation year. The appellant claimed as a deduction from his income the sum of $685.08 which was disallowed by the respondent. In assessing the appellant, the respondent relied, inter alia, upon section 12, paragraph 18(1)(a) and subsection 248(1) of the Income Tax Act, SC 1970-71-72, c 63, as amended.
Facts
The appellant is 74 years of age and is a retired or semi-active insurance salesman. He indicated that two-thirds of his income, now that he is retired, comes from revenue from investments. He sought to deduct the sum of $685.08 from his income, which figure related to subscriptions to the Financial Times and the Toronto Globe and Mail —Business Section; postage used in forwarding stocks and bonds to his broker, correspondence with respect to errors and accounts with his broker and trust companies with respect to dividends. He also claimed car expenses because mail was not delivered to the place where he lived and he had to drive four miles a day in order to pick up daily issues of the Globe and Mail and any other correspondence relating to his investment activities. He also claimed certain accounting fees relating to his dealings in stocks and bonds and he said he spends three to four hours a day on speculating as to what he would do with respect to his investment portfolio. He claimed for telephone calls when he would call in to a broker, seeking advice; in other situations he would call collect if he were buying or selling securities.
Findings
The appellant, to be successful, must qualify under paragraph 18(1)(a) of the Act which reads as follows:
(1) In computing the income of a taxpayer from a business or property no deduction shall be made in respect of
(a) an outlay or expense except to the extent that it was made or incurred by the taxpayer for the purpose of gaining or producing income from the business or property;
Paragraph 20(1)(b) of the Act reads as follows:
(1) Notwithstanding paragraphs 18(1)(a), (b) and (h), in computing a taxpayer’s income for a taxation year from a business or property, there may be deducted such of the following amounts as are wholly applicable to that source or such part of the following amounts as may reasonably be regarded as applicable thereto:
(b) such amount as the taxpayer may claim in respect of any business, not exceeding 10% of his cumulative eligible capital in respect of the business at the end of the year.
“Business” is defined as follows in subsection 248(1):
“Business” includes a profession, calling, trade, manufacture or undertaking of any kind whatever and includes an adventure or concern in the nature of trade but does not include an office or employment.
Unfortunately, the appellant does not qualify for a deduction under the definition of “business” or for the purpose of gaining income under paragraph 18(1)(a) of the Act in that he clearly stated: “I am not in business”, and further, “I am a hobby investor to keep me from being senile”. As a result, it is quite clear that he does not qualify under section 18 or section 20 and I therefore dismiss the appeal.
Appeal dismissed.