In 1987, the taxpayers acquired a three-unit rental property which, they were informed in 1993, was not zoned to permit three rental units. They applied for rezoning approval in 1993, and were required to re-apply in 2010, with their application then being granted. In finding that their related 2010 expenditures (approximately $21,000 in application and consulting fees) were deductible running expense rather than capital expenditures, Woods J noted (at para. 14) that "it is the nature of the expenditures from a practical perspective that should govern," and stated (at paras. 16-18):
Zoning compliance was an ongoing matter from the time the property was acquired in 1987, until the zoning amendment was finally approved in 2010.
Throughout this whole period, the use of the property did not change.
…[T]he expenditures should be viewed as ordinary expenditures incurred in connection with the day-to-day management of the rental property. It is true that the expenditures would likely have a long term benefit ... . However, I do not think that this should tip the balance to result in the expenditures being non-deductible capital expenditures.