Reasonab WHAT IS “a reasonable ‘expectation of profit’? and : Miya does it matter? JACK SPEAKS VEST VANCOUVER - ‘resident and,’ Forest: ‘Alliance ,of B.C. ‘chairman’ Jack Munro guest ‘speaker at the Jan.’ 2! gen- ‘eral: meeting” of.:the North. Van- “conver Chamber of Commerce. ; have’ your own business, whether a sideline. or full-time activity, Revenue Canada needs tu. be convinced (if it asks) that your, business has a reasonable expectation of profit so you will be allowed to deduct. all the expenses’ you claim as part of doing business. / i When you Expenses can. -exceed ~ income, especially during the early years of a. business, That. can give you the . Opportunity, ‘to claim your losses against your ‘other (employment, * - pension, - and so cut your income tax bill. investment) income “Revenue Canada will give you that; tax. break, . but’ wants ‘assurance that within a reasonable ‘ period, your business .will show a - profit which it can then tax, . “A reasonable . expectation - of profit?” is. open. to ‘much . discus- sion. If you write a. book, you “first call the chamber for tickets before Jan. 19 at 987-4488. ESIDENT’S MESSAGE . NORTH VANCOUVER Chamber of Commerce president’ Naomi -¥Yamamoto’s: wish for. the new, year is less spending by. ail levels _. - Of government. ~.: BUSINESS BRIEFS ear ‘Munro: has ‘beetia a driving force . 7 int, the BCS labor “movement: for» * years, particularly during his reign as ; president: “of chapter of ‘the ' International Woodworkers of America (IWA).’ He. joined that’ union in 1962 as its:business; agent in. Nelson: and |.” was ‘elected president. in, 1973,.'a © position he held for 18 years’, a -? The chamber: meeting .begins at 11:45'a.m.-at-’the North Stiore » Winter. Club; 1325 East, Keith WRa., “Those Varicouver, ‘ CASHABLE ANYTIME * | Rates Subject to Change f . $50 000 m ainimum. “in. the’ Update,’ the . Canadian. In a. year-end message’ printed. the. chamber's newsletter; Yamamoto noted that “a United Nations study: found that Canada i is the most livable country in the, -world. She-added that she .would like to think of: that in the : following analogy: ° “There are..two families living “on the same street, the Smiths and > the Browns. Both the. Smiths and ° the Browns enjoy the same family ° : income. . “The Smiths drive a new fancy \ car,. take’ a. family vacation. to. Hawaii every Christmas and en ‘sure that might have years of expenses be- fore you ‘see any income. On the other hand,- a home-based con- sulting business might normally show a profit fairly quickly if all expenses are being covered in. its” _ contracts. A_ hobby... might never show a profi. Buta hobby could be turned into a business venture and become profitable, “In the case of an artist or writer, it is possible that. a tax- payer may not realize .a profit during his or her: lifetime but still have a reasonable expectation of - profit,’? says Revenue Canada in its Interpretation Bulletin | [T- 304R, Visual Artists and Writers. ‘However, to have this ‘rea- ‘sonable’ expectation of profit’ the artistic or literary endeavors of the artist or writer. must, be carried on ‘in a manner-such that... they may . be considered for income tax’.pur- — the Browns. This may be the case® now but at. some time in the future either the Smiths’ or. their children will be required to pay. for their current lifestyle, | * “The . Browns, however, poses to be’ the carrying on of a business rather than, for example, a hobby.”’. Revenue / Canada. ‘then provices alist of factors which can help Heeide whether the famous ‘“rea- sonable expectation of profit’ ex ists. f it stresses that no one factor. is more important than another, and that failure to meet one or more criteria doesn’t necessarily mean a _ failing grade. While’ Revenue Canada “about ar ‘tists and. writers, you will be able: to ‘relate’ most..of the guidelines to any. business venture . — forjexample, the past record of profits: ‘and losses, market. condi- « tions, ‘qualifications ‘and so jon. 1” have Added my .own coniments in parentheses ‘along these lines. * Tine ‘devoted to the artistic. or literéry endeavors. ° (Simply delete “‘artistic’ or literary’’ and this guideline would apply business.) ” o ‘Presentation of. the artist’s, or writer's works appropriate. to. the work. (This: could apply to efforts undertaken ° 40 gain recognition for’ your | business’ products or services.) 7° Time and activities aimed at f promoting and marketing. can,:.® Revenues received relating to the hope for a better. lifestyle in the!’ artist’s/writer’s works... future for themselves . and: thei childrens 6 0" + of ‘Y- see Canada’s current’ situa- tion similar, to that of the Smiths... Canada may currently enjoy iin enviable standard of living; how- ever, like the. Smiths, the future young Canadians may not be enviable,”’ said Yamamoto. fi fs She added that in the new year Canada must turn its attention to .. lifestyle) of so° reducing -the level of gove|nment - spending. i children — of the : © The record,:spanning a‘ signifi- cant number of years, of annual -’ profits or losses. ~~ hoe oA variation, overa period of time, in the value or popularity of ‘the individual’ s artistic or literary , works.” Bet © The typeof: expenses “claimed _ and. their relevance: to ‘the work’, being : done. ‘‘In.'the~ case sof .a writer, ‘for example, there” -woutd ‘be va ‘positive -business activity. if :a substantial portion of the expenses were: in- talks. to any’ in. .public and. _ private settings including. exhib- : iting, publishing and reading as is . _ allows, - “« North. Shore. .News, -. ‘indication of © le expectations differ for businesses. curred , for research,” says Reve-" nue Canada, * The artist’s or writer's “ qualifica-: tions as shown by education ‘and also peer’ recognition through awards, honors, . prizes’ and/or critical appraisal. ‘ ‘ _* Membership .in- a professional association with membership. limited under standards set by, the : association. . : ® The amount and _ giswith. of : gross revenue; with consideration . : given to- external. . factors. like changing economic conditions and. public mood.: wa * The nature of the literary works: the’, broader. the * ‘market; the greater the profit potential. ne, ‘In. other..words, the. - -more ; businesslike ‘your approach. —..to.’ establish ‘that reasonable expecta: ©: tion of profit the better your: chances of. surviving a challenge “by Revenue'Canada.. : A_ well-prepared business plan before ‘ ‘you . start “out * provides | a solid foundation. Review. and up- date this plan. regularly to. demon- strate ongoing ‘profit ‘potential. — especially if: the bottom: line: isn’t always positive, - | : - Mike Grenby | “is. a. North “ Shore-based \ columnist. and dependent. financial. adviser : who works: with individuals; ‘he, will: v answer : your’ ‘questions | as‘ space write’ to. him:"¢/o: “The ! 1139. Lons- dale, North Vancouver. V7M 2H4 The North Shore has. a, ‘wealth. of family. run businesses, Proud : ; operaters, some “spanning” generations: and others with different pe : “generations’ all contributing at one time: . ‘ a ‘“Eamily: Businesses” is .a ‘special feature: designed, with’altorial ‘dedicated to each participating company... wo “ ee: ‘Don't miss your opportunity to tell the North Shore you are. out there. Antony Hutton". "sales representative - ~ £80- 0511 Kirk Michael " sales is resentative