Principal Issues: Can the CRA confirm that expenses for attending a convention for the purpose of earning business income are not subject to the limits of two conventions?
Position: Among other things, where a taxpayer has made or incurred convention expenses for the purpose of gaining or producing income from the business and such expenses are not capital outlays, such expenditures may be deductible in computing his or her income without reference to subsection 20(10).
Reasons: The wording of the Act.
APFF FEDERAL TAX ROUNDTABLE 6 OCTOBER 2017
APFF CONFERENCE 2017
Question 12
Rules for the deductibility of two conferences
The wording of subsection 20(10) permits the deduction of expenses to attend two conventions a year that would otherwise have been considered capital expenditures under paragraph 18(1)(b). We understand from this subsection that convention expenses that would qualify as business-related expenses would not be subject to the two-convention limitation.
Question to the CRA
Can the CRA confirm that expenses for attending a conference which were incurred for earning income from a business are not subject to the two-convention limitation?
CRA preliminary response
Generally, and subject to any provisions to the contrary, a taxpayer may deduct, in computing the taxpayer’s income from a business, reasonable expenses of a current nature incurred by the taxpayer for the purpose earning income from the business.
Where a taxpayer has incurred expenses related to a convention in order to earn income from a business and such expenses are not capital expenditures, such expenses may be deductible in computing its business income without reference to subsection 20(10).
Historically, the CRA's position with respect to convention expenses is that such expenditures are generally capital expenditures to which paragraph 18(1)(b) applies. In addition, paragraphs 18(1)(a) and (h) and sections 67 and 67.1 could apply, depending on the circumstances.
Isabelle Landry
(514) 496-9634
Le 6 octobre 2017
2017-070911