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Claiming mediation on income tax

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  • Claiming mediation on income tax

    When I attended mediation with my ex, the mediator told us that we can claim the cost of mediation on our tax return.
    I can't find anything online about this, or find where to enter the cost on my return.
    Does anyone know if this is true that it can be claimed?

  • #2
    I have just finished talking to the tax office regarding claiming legal fees and such for separation. She clearly said You can only claim legal fees for reason of enforcement to get the money or to get an adjustment on the amount of CS or SS payments ( she included section 7 ) in this as well. She also said on the recipient can claim legal fees, not the payor. You cannot claim for,the initial legal establishment of the agreement.

    Comment


    • #3
      According to the CRA website:

      "If you pay support, you cannot claim legal costs incurred to establish, negotiate, or contest the amount of support payments."
      Line 232 - Legal fees

      The recipient can claim legal fees if they spent them to collect back support payments or increase support payments

      Comment


      • #4
        You can claim 100% of your legal fees for defending your support agreement (recipient of support that is).

        I would contact the mediator and ask them for written clarification of the statement and ask them to highlight the part of the Income Tax Act upon which they are relying to make the statement. I've never heard of this but that doesn't mean it isn't valid. Alternately a Chartered Accountant should be able to advise you.

        Please post again on this when you find out definitively.
        Last edited by arabian; 03-14-2014, 06:26 PM.

        Comment


        • #5
          It seems like a double standard to me. But that's often how it is. You can write it off you defending the support but you can't write it off for force defending not having to pay.

          If someone is going after CS or SS and they are not entitled to it, the one defending cannot write this off for defending it, but if they are going after it because they are entitled they can write it off.

          Comment


          • #6
            In almost all instances CRA requires a copy of your order.
            Each and every year I have to provide a detailed bill from my lawyer.

            If I was not entitled to support, and there was no order awarding me support, then I would be unable to claim legal fees.

            Comment


            • #7
              Originally posted by arabian View Post
              In almost all instances CRA requires a copy of your order.
              Each and every year I have to provide a detailed bill from my lawyer.

              If I was not entitled to support, and there was no order awarding me support, then I would be unable to claim legal fees.
              Yes Arabian I understand that, but what about in the situation where someone is going after SS and they are deemed NOT entitled, but the other spouse had to spend lawyers fees defending a claim that was denied? That spouse is SOL and cannot write off their legal fees because they were not fighting to obtain support they were entitled too, they were fighting to defend support the other spouse was NOT entitled too.

              Comment


              • #8
                Perhaps the Mediator was thinking that the cost could be used as a medical expense ... like at marriage counsellor or therapist ?? It is a reach, but .....

                Comment


                • #9
                  BF in that case then I would think an argument for costs would be in order. Specifically an order which includes and specifies client-solicitor costs.


                  Regarding CRA and legal fees - fast forward to page 29:

                  http://www.pwc.com/en_ca/ca/tax/publ...2011-01-en.pdf
                  Last edited by arabian; 03-14-2014, 09:48 PM.

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                  • #10
                    I wonder how this fits in (post from Tayken):

                    http://www.ottawadivorce.com/forum/f...matters-12709/

                    case law that allowed the payer to deduct the legal fees when support was sought.

                    Comment


                    • #11
                      Mediation isn't a legal service (so hiring a mediator's services to negotiate divorce issues is not the same as hiring a lawyer's services to resolve those issues), and it's not a medical or therapeutic service either (I don't believe any insurance will cover it). It's a pretty unregulated area, as anyone can hang out a shingle and call themselves a mediator; and can do pretty much anything they want, and call it mediation. Given how unregulated it is, I would be very surprised if it's deductible.

                      Comment


                      • #12
                        Many mediators are Lawyers.

                        Comment


                        • #13
                          ... But unfortunately, many are not. The one we used (unsuccessfully) just had a master's in psychology. Others are former social workers who took a six-week course. And I had one owner of a large and well-known mediation firm attempt to recruit me to his staff after meeting me once, on the basis on nothing except personality and having some letters after my name. So the OP may want to check back with the mediator as to exactly why the mediator thinks his services the deductible.

                          Comment


                          • #14
                            I'm in the middle of a process with a mediator/arbitrator (if mediation doesn't work we move on to arbitration) who is a lawyer. I realize some people who are mediators are social workers, psychologists, or the like but the lawyer's services should be deductible if part of the issue being mediated relates to support.

                            Comment

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