INCOME TAX |
Income Calculation |
Mendoza v. Canada
A-120-02, A-119-02
2003 FCA 17, Sexton J.A.
14/1/03
6 pp.
Judicial review of Tax Court decision dismissing applicants appeal in connection with two matters relating to taxation years 1996 and 1997--First matter relates to expenses claimed by applicants as partners in business called Fil-Canadian Express (FCE)--Tax Court Judge (T.C.J.) found taxpayers had failed to present any documentary evidence confirming expenses claimed actually incurred--Second issue relating exclusively to Hornby property--Property rented by applicants to handicapped son and applicants wished to provide accommodation for handicapped son outside of applicants' principal residence--In both taxation years, mortgage interest and repair and maintenance expenses substantially exceeded gross rental income of property-- T.C.J. concluded Hornby property did not constitute a source of rental income as no reasonable expectation of profit--Applicants argued T.C.J. had erred in appreciation of facts in making decision on deductibility of expenses relating to FCE--Court unable to find T.C.J. erred in appreciation of facts--T.C.J. found as factual matter personal element involved in rental of Hornby property--Whether sufficient degree of commerciality in order to constitute source of income for appellants--T.C.J. concluded expenses for Hornby property far exceeded income and no prospect of any changes --No reasonable expectation of profit--T.C.J.'s conclusion not in conflict with principles enunciated in case law--No reversible error on part of T.C.J.--Application for judicial review dismissed.