Entrepreneurship & Small Business

Claiming Ontario expenses against BC income?

  • Last Updated:
  • Apr 1st, 2017 6:36 pm
Newbie
Mar 13, 2017
10 posts

Claiming Ontario expenses against BC income?

Hello,

I incurred quite a bit of expenses and capital loss after a failed start up business in Toronto that I will be claiming when tax filing for the next 2 or 3 years.

I decided to move away from Toronto (to possibly Vancouver) as part of the "healing" process after the failure.

My concern is whether I will be able to claim those Toronto- incurred expenses against BC salary income?

Thank you.

M
6 replies
Penalty Box
Feb 26, 2017
21 posts
3 upvotes
Hi,

Yes, you will be able to claim ON expenses against BC income.. Just make sure the ITC rate on HST is set properly.
Deal Addict
Aug 19, 2013
2397 posts
1091 upvotes
What do you mean you will be claiming them over the next 2-3 years? And are you talking about business expenses or a capital loss?

Business expenses can only be deducted in the year they were incurred. So you need to report them on that years tax return. You can't just decide to claim it in a future year. You can however carry forward any unused non-capital losses to offset income in the future. However if you are talking about anything including business use of home, you can't create a loss with those expenses.

If you are talking about a capital loss, you can only use that to offset a capital gain.
Newbie
Mar 13, 2017
10 posts
Momof3cuties wrote: What do you mean you will be claiming them over the next 2-3 years? And are you talking about business expenses or a capital loss?

Business expenses can only be deducted in the year they were incurred. So you need to report them on that years tax return. You can't just decide to claim it in a future year. You can however carry forward any unused non-capital losses to offset income in the future. However if you are talking about anything including business use of home, you can't create a loss with those expenses.

If you are talking about a capital loss, you can only use that to offset a capital gain.
Thank you for clarifying. It looks like most my losses are non-capital ones. The big bulk was these two categories:

Leasehold improvements: Electricity, Plumbing, Hvac, drywalling, painting, flooring
Equipment & furniture purchases

All part of a terminated business venture. My salary income was negligible in 2016 and there was unfortunately no way I could have claimed all that last year?

Would you confirm the losses above to be under non-capital losses category?

Thank you
Deal Addict
Aug 19, 2013
2397 posts
1091 upvotes
BucketB690891 wrote: Thank you for clarifying. It looks like most my losses are non-capital ones. The big bulk was these two categories:

Leasehold improvements: Electricity, Plumbing, Hvac, drywalling, painting, flooring
Equipment & furniture purchases

All part of a terminated business venture. My salary income was negligible in 2016 and there was unfortunately no way I could have claimed all that last year?

Would you confirm the losses above to be under non-capital losses category?

Thank you
I can't confirm anything. You really should go speak with an accountant who will look at everything. What kind of busines

And some of those do sound like capital expenses. Again you should really sit down with an accountant. Anything you spent in 2016 needs to be reported on your 2016 tax return.
Deal Addict
Feb 29, 2012
2654 posts
1461 upvotes
Richmond
When you acquire something lasting, like furniture or equipment, or you make lasting improvements to the property, those are capital investments that convert cash to assets. The tax treatment isn't the same as operating expenses, because you still own the asset. Instead you write them down over a defined period, or recognize the loss when you sell them.
Newbie
Mar 13, 2017
10 posts
Faith24 wrote: When you acquire something lasting, like furniture or equipment, or you make lasting improvements to the property, those are capital investments that convert cash to assets. The tax treatment isn't the same as operating expenses, because you still own the asset. Instead you write them down over a defined period, or recognize the loss when you sell them.
Thanks for the input, I will be sitting with an accountant soon to properly report stuff.

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