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In Canada, can buying a business be deducted against personal taxable income as other business related expenses would, if one is running it as a sole proprietorship?

  • 2
    Buying a business is not a business expense. – littleadv Aug 31 '15 at 3:47
  • not even if one has existing business, and buys an another existing business to add to their own? – Joe Sep 1 '15 at 14:16
  • of course not. That is called investment and is not tax deductible. – littleadv Sep 1 '15 at 15:22
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Yes, you will be able to claim it as an expense on your taxes, but not all in the current year. It is split into three categories:

  1. Current Expenses - Assets purchased such as inventory would be able to be claimed in the current year.

  2. Assets - Vehicles, Buildings, and equipment can be depreciated over time based on the value you purchased them for and the CCA class.

  3. Goodwill - In tax terms this is the value of the business purchase that is not eligible in 1 or 2 and is called Eligible Capital Property. This can be expensed over time.

From info at CRA website: http://www.cra-arc.gc.ca/tx/bsnss/tpcs/lf-vnts/byng/menu-eng.html

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