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bitteroldman — Thu, 21 Feb 2008 16:51:54 -0800

CanadianTaxesFilter: Can I legally claim some of my debt as an "investment expense" if I give up my second job to focus on my business?

I currently work 2 jobs - one full-time as well as a part-time job to help bring down my debt. Whenever I have free time, I am trying to work on a business that I would like to develop, but there is not much time left at the end of the week.

So I would like to quit the part-time job and spend more time working on the business.

If I would have made about $10-$20K annually with the part time job, could I legally claim $10-$20 K of the debt (and associated interest) as an investment expense?

My rationale is that had I not decided to invest in the business, I would have time for my part-time job and thus would be $10K-$20K richer by the end of the year.

I guess I could always "borrow" $10-$20 K and then pay down $10-$20 K of my debt, so that on paper, I have this amount specifically tagged as a "business investment expense", but I would rather avoid all the paperwork associated with it and besides, I think I have maxed out all my cards!

Thanks!

By: 45moore45

45moore45 — Thu, 21 Feb 2008 17:17:13 -0800

No.

And the tax people give you no extra credit for creative interpretation, sorry.

By: blue mustard

blue mustard — Thu, 21 Feb 2008 17:42:47 -0800

If the tax law allowed this, everybody would claim an extra deduction, because everybody has the potential to work more hours or get a second job. For example, I'm pretty sure I could have been a movie actor making $10 million last year, but instead I decided to develop my own business. Should I be able to deduct the $10 million I didn't make?

However, there may be legitimate opportunities to recoup some taxes if you decide to follow through with your business. You should probably discuss your situation in detail with a tax professional.

By: BozoBurgerBonanza

BozoBurgerBonanza — Thu, 21 Feb 2008 18:13:16 -0800

No. In a nutshell, CRA is only interested in income earned and the (actual) expenses incurred to earn this income.

By: acoutu

acoutu — Thu, 21 Feb 2008 20:04:13 -0800

That $10k-$20k isn't a debt. It's an opportunity cost.

By: bitteroldman

bitteroldman — Fri, 22 Feb 2008 08:41:32 -0800

darn.