Is CMHC fee tax deductible for a work related move? -


Hi there,

I came across your email on the Internet and would like to know if you can answer a question for me about CMHC fees (I live in Canada):

I am wondering about the CMHC fee in terms of a tax deductible... is the CMHC fee is tax deductible as a result of a work-related move?

I lived in B.C. and my employer and I agreed for me to relocate to Alberta (move took place October 2006). We put our house for sale, but it did not sell until the following year (April 2007) and so we carried that property until it sold, and bought in Alberta... we had no choice but to have the CMHC fee because our house did not sell, so we could not afford to put 25% down on a house, and didn't want to risk losing out on the property we bought. Under these circumstances, wouldn't the CMHC fee be an allowable moving expense to claim?

I have been all over the Internet and cannot find a thing about CMHC fees in terms of income tax (except a bit of info related to rental properties). I checked the CRA website and the section for Eligible Moving Expenses, but it's like reading a foreign language at times and the only section that it MAY be included (which it doesn't appear to be is):

-legal or notarial fees for the purchase of the new residence, as well as any taxes paid (other than GST/PST or property taxes) for the transfer or registration of title, to the new residence...

I have asked my accountant to look into this and this was her reply (I am somewhat disturbed that my accountant does NOT have the answer for me, and it was my accountant that e-filed my return and submitted the CMHC fee as part of my moving expenses when I listed all of my expenses for 2006):

The deductibility of the CHMC fee is not clearly spelled out anywhere.
Enclosed is the material on the CRA website on eligible moving expenses
(read the section which is noted with a *).  I would think that the CHMC
fee follows under this area.

You will have to file a Notice of Objection (within 90 days of your
Notice of Reassessment dated December 24, 2007) if you wish to dispute
the disallowance of the CHMC fee.   Please let me know if you want us to
prepare an objection for you.

Please give me a call if you have any questions.  Thanks.

So any light you can shed for me would be a great help—I do not want to waste time or more money paying my accountant to draft up a Notice of Objection if there is no chance it will work (not only would I have to pay the government back the portion of tax for wrongfully submitting my CMHC fee as part of my moving expenses for 2006, I would also have to pay my accountant for this service, which did not work).

Thanks very much,


------------------------------------------------------------
david ingram replies:

I have never seen or heard of anyone deducting the CMHC fee and do not see why it would be deductible because it is a financing fee.  But i come from a time when nothing was deductible for tax purposes on a move and every couple of years, something else gets added. Write your Member of Parliament and complain.

In the meantime, You have until April 30th to file a Notice of Objection for a 2006 tax return.  However, nothing stops you from filing one on your own.  If you win at the objection level, that's it, let me know.  If you lose at the objection level, you can go to the Tax Court on your own. 

Why, would you do this? While waiting fro your court date, someone else may win the same thing giving you a precedent and an automatic win.

Good luck - I am putting this out on my list to see if anyone else has an idea.



On Mar 14, 2008, David Ingram wrote:

It is very unlikely that blind or unexpected email to me will be answered.  I receive anywhere from 100 to 700  unsolicited emails a day and usually answer anywhere from 2 to 20 if they are not from existing clients.  Existing clients are advised to put their 'name and PAYING CUSTOMER' in the subject line and get answered first.  I also refuse to be a slave to email and do not look at it every day and have never ever looked at it when I am out of town. 
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However, I regularly search for the words"PAYING CUSTOMER" and always answer them first if they did not get spammed out. For the last two weeks, I have just found out that my own email notes to myself have been spammed out and as an example, as I wrote this on Dec 25, 2007 since June 16th, my 'spammed out' box has 47,941 unread messages, my deleted box has 16645 I have actually looked at and deleted and I have actually answered 1234 email questions for clients and strangers without sending a bill.  I have also put aside 847 messages that I am maybe going to try and answer because they look interesting. -e bankruptcy expert  US Canada Canadian American  Mexican Income Tax service and  help
Therefore, if an email is not answered in 24 to 48 hours, it is likely lost in space.  You can try and resend it but if important AND YOU TRULY WANT OR NEED AN ANSWER from 'me', you will have to phone to make an appointment.  Gillian Bryan generally accepts appointment requests for me between 10:30 AM and 4:00 PM Monday to Friday VANCOUVER (Seattle, Portland, Los Angeles) time at (604) 980-0321.  david ingram expert  US Canada Canadian American  Mexican Income Tax  service and help.
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Disclaimer:  This question has been answered without detailed information or consultation and is to be regarded only as general comment.   Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist for expert help, assistance, preparation, or consultation  in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included." e bankruptcy expert  US Canada Canadian American  Mexican Income Tax  service and help.
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Phone consultations are $450 for 15 minutes to 50 minutes (professional hour). Please note that GST is added if product remains in Canada or is to be returned to Canada or a phone consultation is in Canada. ($472.50 with GST if in Canada) expert  US Canada Canadian American  Mexican Income Tax  service and help.
This is not intended to be definitive but in general I am quoting $900 to $3,000 for a dual country tax return.
$900 would be one T4 slip one W2 slip one or two interest slips and you lived in one country only (but were filing both countries) - no self employment or rentals or capital gains - you did not move into or out of the country in this year.
 
$1,200 would be the same with one rental
 
$1,300 would be the same with one business no rental
 
$1,300 would be the minimum with a move in or out of the country. These are complicated because of the back and forth foreign tax credits. - The IRS says a foreign tax credit takes 1 hour and 53 minutes.
 
$1,600 would be the minimum with a rental or two in the country you do not live in or a rental and a business and foreign tax credits  no move in or out

$1,700 would be for two people with income from two countries

$3,000 would be all of the above and you moved in and out of the country.
 
This is just a guideline for US / Canadian returns
 
We will still prepare Canadian only (lives in Canada, no US connection period) with two or three slips and no capital gains, etc. for $200.00 up.
 
With a Rental for $400, two or three rentals for $550 to $700 (i.e. $150 per rental) First year Rental - plus $250.
 
A Business for $400 - Rental and business likely $550 to $700
 
And an American only (lives in the US with no Canadian income or filing period) with about the same things in the same range with a little bit more if there is a state return.
 
Moving in or out of the country or part year earnings in the US will ALWAYS be $900 and up.
 
TDF 90-22.1 forms are $50 for the first and $25.00 each after that when part of a tax return.
 
8891 forms are generally $50.00 to $100.00 each.
 
18 RRSPs would be $900.00 - (maybe amalgamate a couple)
 
Capital gains *sales)  are likely $50.00 for the first and $20.00 each after that.

Catch - up returns for the US where we use the Canadian return as a guide for seven years at a time will be from $150 to $600.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc. Note that these returns tend to be informational rather than taxable.  In fact, if there are children involved, we usually get refunds of $1,000 per child per year for 3 years.  We have done several catch-ups where the client has received as much as $6,000 back for an $1,800 bill and one recently with 6 children is resulting in over $12,000 refund. 

This is a guideline not etched in stone.  If you do your own TDF-90 forms, it is to your advantage. However, if we put them in the first year, the computer carries them forward beautifully.
 
This from "ask an income trusts tax service and immigration expert" from www.centa.com or www.jurock.com or www.featureweb.com. David Ingram deals on a daily basis with expatriate tax returns with multi jurisdictional cross and trans border expatriate problems  for the United States, Canada, Mexico, Great Britain, United Kingdom, Kuwait, Dubai, Saudi Arabia, Thailand, Indonesia, Japan, China, New Zealand, France, Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, US, UK, GB, and any of the 43 states with state tax returns, etc. Rockwall, Dallas, San Antonio Houston, Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and Immigration Tips, Income Tax  Immigration Wizard Antarctica Rwanda Guru  Consultant Specialist Section 216(4) 216(1) NR6 NR-6 NR 6 Non-Resident Real Estate tax specialist expert preparer expatriate anti money laundering money seasoning FINTRAC E677 E667 105 106 TDF-90 Reporting $10,000 cross border transactions Grand Cayman Aruba Zimbabwe South Africa Namibia help USA US Income Tax Convention. Advice on bankruptcy  e bankruptcy expert  US Canada Canadian American  Mexican Income Tax service and help .

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