Dear Sirs:
Re: Automobile Expenses
This is in reply to your letter of March 17, 1991 in which you requested clarification of certain statements contained in Interpretation Bulletin IT-521 "Motor Vehicle Expenses Claimed by Self-Employed Individuals".
Paragraphs 22 to 24 of the bulletin discuss the different circumstances in which the expenses related to travelling to rental properties is deductible. Paragraph 22 is intended to indicate that where the rental operation constitutes the carrying on of a business the expenses incurred in travelling to the rented properties are deductible. It is not intended, however, to imply that the operation must constitute a business in order for such expenses to be deductible. The subsequent paragraphs discuss other circumstances in which travel expenses may be deducted.
Where the operation does not constitute a business, the Department has established positions with respect to the deductibility of travel expenses. While paragraphs 23 and 24 of the bulletin set out these rules you will find a more concise description on page 8 of the 1990 Rental Income Tax Guide, a copy of which we have attached for your convenience.
We trust our comments will be of assistance to you.
Yours truly,
for DirectorBusiness and General DivisionLegislative and Intergovernmental Affairs Branch
Enclosure