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Furniture bought for documentary

Expert: John R Mott

Helen asked:

My boyfriend had to acquire a set of furniture for his home for $10,000. He was approached by media as a young entrepreneur to make a documentary about his business. Unless he got this offer, he wouldn't have bought the set as far he didn't need it. He is the only shareholder and the company was incorporated.

The question is whether the company could re-imburse him this $10,000 and it could be capitalized and amortized? Could it be treated as use of personal assets in business or for business purposes?

John R Mott answered:

The documentary may have been the incentive your boyfriend needed to furnish his home, but unfortunately the connection between this expense and the business is too tenuous. The furniture would be regarded as a personal expense.

About the author

John Mott is a chartered accountant and tax specialist with a private practice in mid-town Toronto. He provides tax, accounting and advisory services to individuals and small businesses. He may be visited online at:

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