Quote:
Originally Posted by Autorice
if you declare substantial losses then CRA will begin to think something is fishy. If you record $5000 losses for more than 2+ years then they're going to wonder why you're in business. If you give them a reason to audit you then they will.
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Define substantial loss? I have a client who showed consistent profits for 7 years and than showed a huge loss last year. We were able to use the loss against his previous year earnings and get a refund cheque of over $20,000 from his RC account.
But again the loss has to be justified if you get audited as well. And it was due to leasehold improvements during the year and not being able to concentrate on the day to day activities.