The taxpayer devoted approximately 15 to 20 hours per week selling Amway products in 2019 and 2020, generating a total of $8,706 in revenues from sales to 40 customers over the two years, while claiming expenses of over $32,000 for those years.
In finding that the taxpayer’s Amway activities did not constitute a source of income, so that his losses were not deductible, Cook J. first found that there was a significant, if not predominant, personal element in the taxpayer’s Amway activities. In particular, his level of activity was far in excess of what would be needed to support his modest sales and was consistent with him having a strong interest in business networking, developing business partners, and participating in educational programs, as reflected in his attendance at numerous Amway-connected workshops and other functions.
In the context of having earlier indicated (at para. 3) that Stewart had indicated that “where a taxpayer’s venture has elements that suggest it could be considered a hobby or other personal pursuit, it will be considered a source of income if it is undertaken in a sufficiently commercial manner”, Cook J then went on to find that the taxpayer’s activities were not undertaken in a sufficiently commercial manner to be considered a source of income.