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Young Entrepreneurs Grant

Expert: Donne Lee

Lynn asked:

My friend received a grant for or from Young Entrepreneurs. Is this grant considered income for tax purposes? Must she report the grant received in her business? She does not have any T-Slips showing the grant amount received?

Donne Lee answered:

In general, grants received (which are usually payments in the nature of reimbursements or inducements for the acquisition of an asset or the incurring of a deductible expense) must be included in income for tax purposes unless the cost basis of the related asset is otherwise reduced due to a provision or election under tax law. Determining whether a reduction in the cost basis of an asset is possible will depend on the particular facts and circumstances.

If a grant that was previously included into income is later repaid pursuant to a legal agreement, the payment will be deductible from income.

About the author

Donna Lee is a Senior Tax Manager at Meyers Norris Penny LLP in Calgary, AB.

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