Income Tax Act — I-3.3 18
General limitations 18 (1) In computing the income of a taxpayer from a business or property no deduction shall be made in respect of General limitation (a) an outlay or expense except to the extent that it was made or incurred by the taxpayer for the purpose of gaining or producing income from the business or property; Capital outlay or loss (b) an outlay, loss or replacement of capital, a payment on account of capital or an allowance in respect of depreciation, obsolescence or depletion except as expressly permitted by this Part; Limitation re exempt income (c) an outlay or expense to the extent that it may reasonably be regarded as having been made or incurred for the purpose of gaining or producing exempt income or in connection with property the income from which would be exempt; Annual value of property (d) the annual value of property except rent for property leased by the taxpayer for use in the taxpayer’s business; Reserves, etc. (e) an amount as, or on account of, a reserve, a contingent liability or amount or a sinking fund except as expressly permitted by this Part; Unpaid claims under insurance policies (e.1) an amount in respect of claims that were received by an insurer before the end of the year under insurance policies and that are unpaid at the end of the year, except as expressly permitted by this Part; Payments on discounted bonds (f) an amount paid or payable as or on account of the principal amount of any obligation described in paragraph 20(1)(f) except as expressly permitted by that paragraph; Payments on income bonds (g) an amount paid by a corporation as interest or otherwise to holders of its income bonds or income debentures unless the bonds or debentures have been issued or the income provisions thereof have been adopted since 1930 (i) to afford relief to the debtor from financial difficulties, and (ii) in place of or as an amendment to bonds or debentures that at the end of 1930 provided unconditionally for a fixed rate of interest; Personal and living expenses (h) personal or living expenses of the taxpayer, other than travel expenses incurred by the taxpayer while away from home in the course of carrying on the taxpayer’s business; Limitation re employer’s contribution under supplementary unemployment benefit plan (i) an amount paid by an employer to a trustee under a supplementary unemployment benefit plan except as permitted by section 145; Limitation re employer’s contribution under deferred profit sharing plan (j) an amount paid by an employer to a trustee under a deferred profit sharing plan except as expressly permitted by section 147; Limitation re employer’s contribution under profit sharing plan (k) an amount paid by an employer to a trustee under a profit sharing plan that is not (i) an employees profit sharing plan, (ii) a deferred profit sharing plan, or (iii) a pooled registered pension plan or registered pension plan; Use of recreational facilities and club dues (l) an outlay or expense made or incurred by the taxpayer after 1971, (i) for the use or maintenance of property that is a yacht, a camp, a lodge or a golf course or facility, unless the taxpayer made or incurred the outlay or expense in the ordinary course of the taxpayer’s business of providing the property for hire or reward, or (ii) as membership fees or dues (whether initiation fees or otherwise) in any club the main purpose of which is to provide dining, recreational or sporting facilities for its members; Safety deposit box (l.1) an amount paid or payable in respect of the use of a safety deposit box of a financial institution; Limitation re employee stock option expenses (m) an amount in respect of which an election was made by or on behalf of the taxpayer under subsection 110(1.1); Political contributions (n) a political contribution; Employee benefit plan contributions (o) an amount paid or payable as a contribution to an employee benefit plan; Salary deferral arrangement (o.1) except as expressly permitted by par