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Hello Madan,
I want to file a first time Return for an Inactive Corporation in Ontario. Can start up and operating expenses like office rent and business consulting fees be claimed as business loss in this year's NIL return when there is no activity or revenue throughout the year. Can these expenses be treated as business loss and be carried forward to next year by filing regular T2 or T2short return?
Thank you in advance and appriciate your time!!
The answer to your question depends on whether your company has started to carry on a business. For example, a start-up company that is marketing its business to potential customers and engaging in business development activities is considered to be carrying on business, even if it has no revenues. As such, if you have started to carry on a business, then start-up expenses can be claimed. The resulting business loss (called a non-capital loss) can be carried forward for a period of up to 20 tax years. To record business losses, complete the T2 Return and Schedule 4 (along with the relevant GIFI Schedules, 100 and 125).