He expensed the travel expense on its financial statements (not for tax deduction), paid $38million of the $42 using business money, and left $4million as shareholder benefit.Įven though he didn’t deduct the $38M on its tax return, the $38M paid for by Cirque du Soleil for the benefit of its shareholder is still considered taxable benefit in Guy Laliberte’s personal tax return. It was not deducted in his business’s tax return. Maybe he was aware that the expenses aren’t deductible. He claimed deduction of his entire trip in Cirque du Soleil’s operation, stating that this trip increased publicity and provided media coverage that would otherwise cost over $300million to achieve. Let’s use his case as an example:Ĭirque du Soleil’s majority shareholder, Guy Laliberté tried to deduct expenses related to his travel to space as a business expense back in 2018. Some of you may remember the infamous court case involving the founder of Cirque du Soleil. How Guy Laliberté tried to deduct expenses and failed For instance, if you rented a car out, did you go with a fair average car or did you rent a Lamborghini? Were your expenses necessary or were they extravagant? Expenses deducted have to be reasonable.What is the return on investment for your trip? Are you connecting with a new supplier? Visiting a customer?.Was your trip mostly business? Or did you spend the majority of your time that wasn’t occupied for the purpose of earning a business income, i.e meeting with clients vs. In simpler terms… it must qualify as a “business trip”. To deduct your travel expenses you need to show that your trip was for the purposes of earning a business income.
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