Real Estate Expenses

Tax Topics
1

Need a bit of advice, which line on T2125 is more appropriate to claim clothes for a Real Estate Agent?

2

There is no line (or deduction) for buying clothes unless your client is buying some kind of real estate agent uniform. I got this from the CRA Employment Expense guide. I know the agent is self-employed but the concept is the same.

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3

As far as I am aware clothes are not deductible anywhere unless they are specific safety or uniform clothing that would not ever be worn out and about if not on the job. Nice clothes for a real estate agent don’t fall under this and are not deductible.

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4

None.

Atul

5

Is there a Re/Max balloon logo on the client’s jacket?

Then possibly…

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6

With all due respect, this kind of question scares me.

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7

@msbuttar

The matter of clothing expense such as suits etc was settled back in the 1970’s or 1980’s. I can no longer access these rulings as they are so old.

  • Suits etc are not an allowable expense.
  • Safety clothing,protective equipment, uniforms, and some “costumes” are allowable for legitimate and when used exclusively for business use.

This is one of those common legends which were disallowed in 70’s 80’s, or 90’s.

Others such long held CRA tax audit exclusions:-

  • No private club fees even used for entertainment.
  • No golf fees.
  • No meal chits at private country, golf, or other sports clubs.
  • No gifts of bottles of wine.
  • No speeding or other motor vehicle tickets.
  • No parking tickets.
  • No business use of home for family doctors when used part-time and only occasionally.
  • No IT consulting or other consulting to big banks as a self-employed when working on a per diem during a contract period. In this case you are an employee.
  • No cases of beer at the end of the day for building contractors.
  • No fast food meals delivered on site for building contractors or picked up between job sites.
  • etc

Some of these exclusions were in the old interpretation bulletins and have not been updated in the current folios. Others were in old internal or external rulings. Some were the result of Tax Court Rulings. Yet others were CRA administrative policies administered in the field.

Please note that these may vary over time or by auditor.

It might be fun some day to run a list of all the expense claims denied at audit, and, all the self-employed income claims reclassified as employment income with allowable business expenses except for documented employment expenses.

8

Actually, the Courts have done an admirable job of that already, and any basic tax training materials will identify that where items “could be” considered “personal or living expenses” they will be non-deductible.

Some things were legislated (fines eg.) to be non-claimable, while others are simply the result of long history as you point out.

It of course, doesn’t stop people from burying these types of expenses in their books deeply enough (VISA bills) that we don’t see them in corporate situations.

9

Thanks, everyone, for your time and valuable responses. This is a great platform to clear all kinds of doubts.

10

What about haircuts for cops?

I used to get those haircut receipts all the time… :wink:

11

And, many years ago, watch cleaning and adjusting for railway workers was definitely allowed.

From “snoplowguy via protaxcommunity.com” <notifications@taxcycle.discoursemail.com>
To neal@nealnicholson.ca
Date 2023-03-29 2:09:33 PM
Subject [protaxcommunity.com] [Tax Topics] Real Estate Expenses

12

squote=“neal, post:11, topic:6805”]
And, many years ago, watch cleaning and adjusting for railway workers was definitely allowed.
[/quote]

Oho!! That’s a new one to me!!

Ran across quite a few funny ones as a young CRA auditor back in the 1970s…and Real Estate salespeople were the WORST for made-up expenses. At least the contractors just had missing, but likely, eligible, expenses.

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13

My funniest one so far this year is a retired teacher who included receipts for about $45,000 spent on her house (she’s not disabled and the receipts were for her new deck and kitchen). When I asked her what they were for she said that she saw a Tik Tok video that said you could deduct these costs. I told her that Tik Tok is great for cat videos but there’s a reason she has my phone number. She also blasted me because I didn’t tell her to increase her tax withholdings after last year’s tax return … she owed $350.

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14

LOL - there’s a client I’d be sending down the road. Gave up dealing with people like that a LONG time ago!!

But I liked your response. :slight_smile:

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15

I did see a bullet proof vest claimed as an employment expense refused.

16

Unless you’re in security or law enforcement, I can’t see that even being claimed.

17

Yes it was a policeman, but still refused, probably the municipality refused to prepare a “conditions of employment”.