Providing dependable and mobile bookkeeping services for Central Alberta businesses

The main question to ask yourself is “Is there a reasonable expectation of profit” when conducting activities in a start-up venture. Quite often in a new business, time and money must be spent before revenue is generated. Expenses must be fully documented and be made with a profit motive. Otherwise CRA may use their 3 year time frame to audit expenses and judge whether they were commercial or more personal in nature.

For further information, reference should be made to Policy Statement P-176R entitled “Application of Profit Test to Carrying on a Business” on the website

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