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Old 03-03-2017, 03:02 PM
Whitetail200 Whitetail200 is offline
 
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Default Claiming Expenses

I know not everyone does this , some say is it really worth it . I ran into a guy at Halfords's & he mentioned he will , supplies , gas . So I said for the 2016 season given the season for coyotes for example , he said no , the whole trapping season from November 1 to the end of February 28 /17 . I said what ! , sure you can only claim expenses for 2016 & the rest of expenses incurred in 2017 for next tax season . He's thinking he can . ??? . I was told for example when I inquired about vehicle fuel claim that you have to keep track of your mileage for the year , keeping fuel receipts & then your mileage for your trapping season , then they figure out percentage apparently . So this again would be part claim for 2016 then remainder for 2017 expenses ? . Those of you that do or have could maybe share some advice or ideas on this subject . Thanks
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Old 03-03-2017, 05:05 PM
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Originally Posted by Whitetail200 View Post
I know not everyone does this , some say is it really worth it . I ran into a guy at Halfords's & he mentioned he will , supplies , gas . So I said for the 2016 season given the season for coyotes for example , he said no , the whole trapping season from November 1 to the end of February 28 /17 . I said what ! , sure you can only claim expenses for 2016 & the rest of expenses incurred in 2017 for next tax season . He's thinking he can . ??? . I was told for example when I inquired about vehicle fuel claim that you have to keep track of your mileage for the year , keeping fuel receipts & then your mileage for your trapping season , then they figure out percentage apparently . So this again would be part claim for 2016 then remainder for 2017 expenses ? . Those of you that do or have could maybe share some advice or ideas on this subject . Thanks

If you're claiming these expenses personally, not as a corporation I mean, then the calendar year is how it goes. Date on the receipt, is the year it's claimed in. Same as yearly depreciation of your vehicle, interest on loans, insurance, licenses, whatever else you're going to claim.
Now you can claim as much as you you, whenever you want, with absolutely no issues whatsoever. That is until you're audited and have to prove it all, then your ducks better all be in a row. Or else she's reassessments, interest and penalty time
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Old 03-03-2017, 09:19 PM
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TBark TBark is offline
 
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I was thinking of claiming expenses against fur income, but I got skunked this year, Gov would never believe that, ha.

TBark
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Old 03-03-2017, 09:20 PM
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Originally Posted by Whitetail200 View Post
I know not everyone does this , some say is it really worth it . I ran into a guy at Halfords's & he mentioned he will , supplies , gas . So I said for the 2016 season given the season for coyotes for example , he said no , the whole trapping season from November 1 to the end of February 28 /17 . I said what ! , sure you can only claim expenses for 2016 & the rest of expenses incurred in 2017 for next tax season . He's thinking he can . ??? . I was told for example when I inquired about vehicle fuel claim that you have to keep track of your mileage for the year , keeping fuel receipts & then your mileage for your trapping season , then they figure out percentage apparently . So this again would be part claim for 2016 then remainder for 2017 expenses ? . Those of you that do or have could maybe share some advice or ideas on this subject . Thanks
Ooooo. I see a letter from cra coming for an audit. I hope he's truly runnng as a business. Not many out there that will win this argument.
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Old 03-03-2017, 09:35 PM
sourdough doug sourdough doug is offline
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This was brought up in a thread probably about a month ago and I told the OP just about the same thing as Tork just said.
I did the expense thing for the first couple years to cover some high end ticket items.....sled, quad and gen set, that sort of things. Then my accountant said to be prepared cuz they will not allow this to continue if you cannot cover your expenses with income received.
Nuff said
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Old 03-03-2017, 09:35 PM
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Isn't it all about earning fur income ?
So you have to claim fur income, pay tax, but not claim expenses ?

TBark
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Old 03-03-2017, 10:01 PM
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Yes, you pay tax on the fur you sell. But... the expenses go against all income earned, not just trapping. So if you're paying tax period, you can deduct your total expenses, up to the amount of tax you paid.

Now if you own a corporation, you just pay less tax innthe end 😉
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Old 03-03-2017, 10:17 PM
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Sounds like you can't claim a loss then Tork?
Why is trapping as a business different than any other business ?
Should be able to show a loss if expenses exceed income.

TBark
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Old 03-04-2017, 07:27 AM
wellpastcold wellpastcold is offline
 
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Sounds like you can't claim a loss then Tork?
Why is trapping as a business different than any other business ?
Should be able to show a loss if expenses exceed income.

TBark
Yes of course you can make the claim. I believe Tork was simply letting folks know that you need to have documentation. As someone who went through a corporate audit this year, I can tell you it is a pain.
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Old 03-04-2017, 09:27 AM
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Originally Posted by TBark View Post
Sounds like you can't claim a loss then Tork?
Why is trapping as a business different than any other business ?
Should be able to show a loss if expenses exceed income.

TBark
You can claim a loss, and write it off against other income. But you must have a reasonable expectation of making a profit. They will generally be OK with tax losses for a couple of seasons, but after that if you want to keep operating at a loss you will just have to carry forward losses to be used against any future years earnings.

That is the gist of it, a tax accountant could probably explain it better
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Old 03-04-2017, 10:16 AM
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Got this reply from a fellow on another forum, interesting.

Note, the "reasonable expectation of profit" argument that RC used for so long to deny deductions has been tossed. RC was claiming if the venture failed to show profit then deductions were denied, "reasonable expectations or not"

http://www.incometaxcanada.net/news/...ect-profit.htm
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Old 03-04-2017, 10:53 AM
Big Grey Wolf Big Grey Wolf is offline
 
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My recommendation is do not get to carried away with expenses Eg: trying to deduct a steak dinner at Keg in Whitecourt as meal expense, buying new Ford diesel for $70K, new snowmobile for $15K and SXS Quad $20K and saying for trapping. A modest trapping operation with some good fur years with chance of profit will probably not be audited. After all trapping is oldest industry in Canada since 1670, how can CRA say it is not viable business.
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Old 03-04-2017, 01:23 PM
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Quote:
Originally Posted by TBark View Post
Got this reply from a fellow on another forum, interesting.

Note, the "reasonable expectation of profit" argument that RC used for so long to deny deductions has been tossed. RC was claiming if the venture failed to show profit then deductions were denied, "reasonable expectations or not"

http://www.incometaxcanada.net/news/...ect-profit.htm
Thanks, I find that interesting.
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Old 03-05-2017, 12:56 AM
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Quote:
Originally Posted by TBark View Post
Sounds like you can't claim a loss then Tork?
Why is trapping as a business different than any other business ?
Should be able to show a loss if expenses exceed income.

TBark
Yes you can claim loses.

When I said if you pax any tax, you can use these loses against that. By any tax I mean from any form of taxable revenue, not just trapping.
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Old 03-05-2017, 01:11 AM
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IE. $100,000 total income from operating equipment in the oilfield
You had $28,000 deducted for personal tax by your employer

You trapped a total of $7,000 worth of fur for the year, bringing your gross income up to $107,000.

But, you had $17,000 worth of expenses while trapping including fuel, insurance, licenses, traps etc etc etc.

This now reduces your net income to $90,000, but you paid tax on $100,000. This is where the refund comes into play. Which would be right around $3K or so.

Your trapping income goes on line 104 of your T4.

Again, you can claim all you want. But... be prepared to prove it one day 😉
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Old 03-05-2017, 09:33 AM
petew petew is offline
 
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Don't forget that when you depreciate a vehicle etc against taxes, when you dispose of the said vehicle, etc what you get for it is now income. They will not accept a ridiculous low price sold to yourself, of wife etc. Personal use of the company vehicle is also a taxable benefit.. And if you are using a vehicle as a business expense it needs to be insured as a business vehicle.
When I trapped in the 80's , you could only show a loss for 3 years .
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Old 03-05-2017, 12:48 PM
sourdough doug sourdough doug is offline
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Sometimes its best not to poke a bear in the ass when in the den. If we keep this up we will have the IRS over every trapper with a fur acct..
Thank you very much
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Old 03-05-2017, 01:24 PM
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Originally Posted by sourdough doug View Post
Sometimes its best not to poke a bear in the ass when in the den. If we keep this up we will have the IRS over every trapper with a fur acct..
Thank you very much
Smart man here

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  #19  
Old 03-06-2017, 11:27 AM
Big Grey Wolf Big Grey Wolf is offline
 
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Doug good advice, but with over 345 years of trapping business in Canada do you think CRA has not reviewed any trapper tax claims.
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Old 03-06-2017, 02:18 PM
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Doug good advice, but with over 345 years of trapping business in Canada do you think CRA has not reviewed any trapper tax claims.
Very good advice but Why draw attention to them ??
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  #21  
Old 03-06-2017, 02:41 PM
Whitetail200 Whitetail200 is offline
 
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Default Claiming Expenses

Thanks for every ones input , but it sounds it might not be worth it in the long run & turn into a hassle , if you make a said amount on your fur then this would help in recouping some of the cost in supplies , gas , ETC. & just carry on , if you have a loss one year & didn't do as good then so be it , the following year might make up for it . We all would like to get some money back from costs incurred at tax time if you put it as a small business but if it creates a concern / hassle, skip it , your total income from say a pipeline job ETC adding what you get for fur return is your total income & you'll have to pay the appropriate tax . I'm sitting on the fence line with this not sure if I should continue claiming supply costs ETC. for this year . Will have to discuss this further with my accountant & what or if anything would come about if I just stop claiming as a small business . Thanks again every one
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  #22  
Old 03-09-2017, 01:10 PM
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CRA fully expects you to claim the $2000 you make from selling fur, if you are not going to claim the expenses it takes to make that money you are silly, in my opinion. Like has been mentioned just have proper receipts and documentation to back up your claims and you have nothing to worry about. This is a business just like any other, you outlay funds for resources to aide you in turning a profit, some years you turn a profit and maybe others you don't. Either way the law says to claim revenues and expenses. Don't allow the CRA bully tactics to stop you from claiming reasonable expenses as allowed by Parliament.
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Old 03-09-2017, 08:51 PM
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CRA fully expects you to claim the $2000 you make from selling fur, if you are not going to claim the expenses it takes to make that money you are silly, in my opinion. Like has been mentioned just have proper receipts and documentation to back up your claims and you have nothing to worry about. This is a business just like any other, you outlay funds for resources to aide you in turning a profit, some years you turn a profit and maybe others you don't. Either way the law says to claim revenues and expenses. Don't allow the CRA bully tactics to stop you from claiming reasonable expenses as allowed by Parliament.
And we hate giving them any more then we have to
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Old 03-10-2017, 07:52 AM
Whitetail200 Whitetail200 is offline
 
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Default Claiming Expenses

Here is what I was told from my accountant yesterday ,Boonerkiller & Tork's comments are right about claiming . You have till June 15 TH to file , includes any self Employed Business . Claims put in to replace or continue for the following year would be good as I'm showing /claiming fur income . If you quite claiming & not make any profit on furs , no big deal just carry on , But if any profit you should be claiming. ( ALL Income ) of course this is what is required . There is no set years or cut off for keep showing losses , but if people keep doing this it could get red flagged . So I don't know & didn't ask but if a person keeps making money on their furs from auctions & not putting in any claims for expenses then CRA may be able to find out but I'm not sure if they can . I had done this in earlier years but decided to go the claim route for small business to get some of my expenses covered , Just keep receipts for costs incurred ETC . Asked about getting Audited , IT IS ONLY DONE AT RANDOM , but for what I'm doing he doesn't see I have to worry about it .
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Old 03-10-2017, 11:14 AM
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Originally Posted by Whitetail200 View Post
Here is what I was told from my accountant yesterday ,Boonerkiller & Tork's comments are right about claiming . You have till June 15 TH to file , includes any self Employed Business . Claims put in to replace or continue for the following year would be good as I'm showing /claiming fur income . If you quite claiming & not make any profit on furs , no big deal just carry on , But if any profit you should be claiming. ( ALL Income ) of course this is what is required . There is no set years or cut off for keep showing losses , but if people keep doing this it could get red flagged . So I don't know & didn't ask but if a person keeps making money on their furs from auctions & not putting in any claims for expenses then CRA may be able to find out but I'm not sure if they can . I had done this in earlier years but decided to go the claim route for small business to get some of my expenses covered , Just keep receipts for costs incurred ETC . Asked about getting Audited , IT IS ONLY DONE AT RANDOM , but for what I'm doing he doesn't see I have to worry about it .
Thanx for your efforts . It only makes sense that a person be able to claim some expense , after all , I dont know any business that makes income without incurring expense along the way . The key is to be totally honest and not overdue it .. avoid having to pay the piper in the end .
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