Sandra started up her own business a couple of years ago. It has been tough getting it going. In fact, she has incurred a loss each year so far (i.e. her expenses have been greater than her income) and has claimed this business loss on her personal tax return. a) If the CRA were to question the losses that she has claimed, Sandra would need to demonstrate that there was a “reasonable expectation of profit”. How could she show this? In other words, what factors would be considered by the CRA? b) If the CRA were to determine that there was NOT a reasonable expectation of profit, what would the result be?

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1 a Sandra could show the CRA that these expenditures will be helpful and ... View the full answer