Moving expenses Flashcards
Moving expenses (Taxation)
In order for any moving costs to be deductible for tax purposes, the move must be an “eligible relocation” and the costs incurred must be deductible moving expenses.
* Eligible relocation is:
o Occurring as a result of a new work location within Canada, and
o One in which the new residence is at least 40 kilometres closer to the new work location than the old residence
* Deductible moving expenses include:
o Selling costs related to the old residence (i.e. commissions)
o Costs to transport household goods (i.e. moving company costs, etc.)
o Legal fees associated with the purchase of a new residence
o Disconnecting and connecting utilities, revising legal documents to reflect a new address, replacing driver’s licenses
o Travelling costs
o Meals and lodging (not exceeding 15 days, not including travel days)
o Costs of cancelling a lease on the old residence
o Up to $5,000 of interest, property taxes, insurance, heating and utilities costs on the old resident, subsequent to the time when the taxpayer has moved out, during which reasonable efforts are made to sell the property
* Examples of costs that are not deductible include:
o Home renovations for the old property in advance of the sale (these are capital in nature and would be added to the capital cost of the old property)
o Travel expenses for a house-hunting trip
Reference: ITA 248(1); 62
