Are expenses that are paid for by a corporation deductible when income flows through the corporation?
British Columbia, Canada
The following excerpt is from Ursel v. Ursel, 2014 BCSC 1219 (CanLII):
For example, in Hadjioannou v. Hadjioannou, 2013 BCSC 43, the court found that the tax deductions from the corporate income included expenses which provided a personal benefit to the respondent. Telephone, internet and vehicle expenses, along with food, meals and entertainment were all included in that category. The court added these expenses back in, noting that it would “not be appropriate … to deduct this type of ordinary living expense from the claimant’s employment income” and that therefore it was not appropriate to permit its deduction when income flowed through a corporation. (See also Reis v. Bucholtz, 2008 BCSC 1156, aff’d 2010 BCCA 115.)
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