TAXES - Moving Expenses Question - Help!

[sslinn]

My buddy is selling his home and purchasing another in the smaller community where he currently works to stop his 40KM commute.

Not changing jobs so will he still qualify to deduct his moving expenses which will be substantial with the realtor commission.

Your help is appreciated.

Thanks!!

[habsfan93]

You don't need to be changing jobs.
As long as the new home is at least 40km closer to the workplace, then you can claim the moving expenses.
If unsure, call CRA to confirm though I think would be the best approach.

[ghostryder]

You don't need to be changing jobs.
As long as the new home is at least 40km closer to the workplace, then you can claim the moving expenses.
If unsure, call CRA to confirm though I think would be the best approach.

Not true. You must be moving to be closer to a "new work location" such as a new employer, or when your current employer relocates you.

http://www.cra-arc.gc.ca/E/pub/tp/it178r3-consolid/it178r3-consolid-e.html#P76_3603

1. If an individual changes residences in Canada because of starting to carry on a business or to be employed at a new location, amounts paid for "eligible moving expenses" (see ¶s 12 to 17 below) incurred in moving from the old residence to the new residence may be deducted. However, the move must result in the taxpayer living at least 40 kilometres closer to the new work or business location and the deductibility of such expenses is subject to the limits discussed in ¶s 2 to 4 below.

[IMHIP2]

Agree with ghostryder.

We always joke about what is defined as "a new work location".

Could it be that your employer moved your office or desk within the same building? Definitely a new work location but I wouldn't want to be the one to challenge CRA on it.

[brunes]

Not true. You must be moving to be closer to a "new work location" such as a new employer, or when your current employer relocates you.

http://www.cra-arc.gc.ca/E/pub/tp/it178r3-consolid/it178r3-consolid-e.html#P76_3603

1. If an individual changes residences in Canada because of starting to carry on a business or to be employed at a new location, amounts paid for "eligible moving expenses" (see ¶s 12 to 17 below) incurred in moving from the old residence to the new residence may be deducted. However, the move must result in the taxpayer living at least 40 kilometres closer to the new work or business location and the deductibility of such expenses is subject to the limits discussed in ¶s 2 to 4 below.

I would think that if they moved your desk from the west side of the building to the east side, and you previously lived west of the building, you could very well move to somewhere east of the building within the same distance. You would be totally within the letter of the law, proveable in court with GPS.

Maybe you wouldn't be within the *spirit* of the law, but that is not how the law works - they should have made the language clearer.

[habsfan93]

Not true. You must be moving to be closer to a "new work location" such as a new employer, or when your current employer relocates you.

http://www.cra-arc.gc.ca/E/pub/tp/it178r3-consolid/it178r3-consolid-e.html#P76_3603

1. If an individual changes residences in Canada because of starting to carry on a business or to be employed at a new location, amounts paid for "eligible moving expenses" (see ¶s 12 to 17 below) incurred in moving from the old residence to the new residence may be deducted. However, the move must result in the taxpayer living at least 40 kilometres closer to the new work or business location and the deductibility of such expenses is subject to the limits discussed in ¶s 2 to 4 below.

Interesting...good to know.
Although, personally, I don't think it should matter whether or not you're starting a new job. I you live 50 km away from your job (like I do) and you move to a place that is 5-10 km away, that's a pretty significant move, I think you should be able to claim that. To this I say boo.

[srg83]

heh, pretty sure I'm safe then. Moved back from Sudbury > Ottawa :P

[ghostryder]

Interesting...good to know.
Although, personally, I don't think it should matter whether or not you're starting a new job. I you live 50 km away from your job (like I do) and you move to a place that is 5-10 km away, that's a pretty significant move, I think you should be able to claim that. To this I say boo.

I would think that if they moved your desk from the west side of the building to the east side, and you previously lived west of the building, you could very well move to somewhere east of the building within the same distance. You would be totally within the letter of the law, proveable in court with GPS.

Maybe you wouldn't be within the *spirit* of the law, but that is not how the law works - they should have made the language clearer.

Well the ITA is a bit clearer.

"eligible relocation" means a relocation of a taxpayer where

(a) the relocation occurs to enable the taxpayer

(i) to carry on a business or to be employed at a location in Canada (in section 62 and this subsection referred to as "the new work location"),

Since you already 50km from your present job, moving closer does not "enable" you to do that job any differently. You chose to live 50km away. And I doubt any Judge would see moving your desk 20 meters as a reasonable interpretation of "new work location".

In case the court may agree with you, I await decisions from the Tax court on brunes v. Minister of National Revenue and habsfan93 v. MNR to clarify this. Good luck.