Monthly Archives: November 2017

How Richard Wojcik’s Tax Relief Could Be Enough Consolation

Richard Wojcik’s woes with buying a funeral parlor in Manitoba should net him some tax relief from the Canadian government. After all, his efforts appeared earnest when he tried to buy a pre-owned business that turns out to have a can of worms or is it a Pandora’s box of one controversy after another?

Richard Wojcik’s remarks that he didn’t want to drag the small town of Beausejour into more scandals demonstrate his desire to avoid glaring media attention to the risks of owning a funeral home. Obviously, Richard Wojcik’s instincts as a businessman didn’t work for him well when he initially sized up the potential as well as the prospects of adding the business to his portfolio. The federal government should be sensitive to issues such as Richard Wojcik’s because sooner or later, every entrepreneur, no matter how seasoned are bound to end up in a quagmire of legal mumbo-jumbo.

Bailing out entrepreneurs who are the engines of economic growth should, in fact, be a first priority for the Canadian revenue agency. As it sits right now, Richard Wojcik’s troubles can be alleviated by a provision in the tax code that considers business losses as credits towards lowering an entrepreneur’s tax obligations. Specifically, Richard Wojcik’s difficulties since acquiring Russell Funeral Homes in 2009 can draw comfort from the so-called ABL provision in the local Canadian tax code.

Accordingly, Richard Wojcik’s income declaration may be lessened by as much as half of his business losses for the given year. This redounds significantly into paying 50% less tax than he would have to shell out without the loss. What more, Richard Wojcik’s income tax situation gives him the flexibility to defer the tax credit three years backward or ten years forward.

After a decade, whatever is left over from Richard Wojcik’s losses gets reclassified as a valid capital loss. So the moral of the story is that business losses don’t always end up a tragedy. In fact, it could be a fairytale ending if Richard Wojcik’s tax clerk knows how to exploit the tax provision to the hilt.