XXXXXXXXXX
XXXXXXXXXX (the "taxpayer")
We are writing with respect to the T2003 of January 15, 1993, from the T1 Adjustments, Assessing Section XXXXXXXXXX in your office, regarding the November 26, 1992, letter from the above noted taxpayer.
As we understand the situation, the taxpayer is concerned about the income tax implications for the amounts he receives from the XXXXXXXXXX (the "school") in return for providing room and board to students from the school.
In a recent telephone conversation with the taxpayer, we advised that:
- since the nature of his enquiry relates to an actual situation that falls within the jurisdiction of the district office, we would be providing our comments to the district office who would reply to his enquiry.
- since the determination requested involves a finding of fact, a binding ruling could not and would not be given.
With respect to his enquiry the taxpayer further advised that:
- he is not employed by the school and only recently became involved in providing room and board to students.
- the services provided are anywhere from one month to five months in duration, for which he receives $125 per week. He has been reporting these amounts as income and has been deducting reasonable expenses incurred in this regard.
- the school apparently received an oral opinion from someone in an unnamed district office indicating that, since he was considered to be a "host family", the amounts were not taxable.
- in the absence of a written opinion to the school, the taxpayer wanted clarification of his income tax position.
OUR COMMENTS
From the limited information submitted by the taxpayer, it appears that the services provided by the taxpayer is an endeavour which generates net income after deducting relevant expenses. Accordingly, it is our opinion that the amounts received could be considered to be income from business and that the taxpayer's procedure of reporting these amounts, net of reasonable expenses should be continued.
The taxpayer's letter along with Forms T702 dated December 16, 1992, and T2003 dated January 15, 1993, are attached.
P.D. Fuoco Section Chief Personal and General Section Business and General Division Rulings Directorate Legislative and Intergovernmental Affairs Branch