AN EVENING WITH PETER WEINRICH
at the Potters Guild of B.C.
June 17, 1987

Peter Weinrich is Executive Director of the Canadian Craft Council and
an advisor to the Commission on the Status of the Artist, Department
of Communications. Ottawa. In this latter capacity he contributes

advice and information to government ministers involved in the crafts.
He spoke on topics of tamation: charitable tax status. federal sales
tax regulations, exemptions and tariffs. The following is a summary
of what took place,

Fer taxation purposes, potters have to be identified as either profess-
ional ("business") or “hobbyist". The "business" classification depends
on one's “expectation to make a profit". and all others fall into the
“hobbyist” category. The “expectation of profit” has to be demonstrated
to Revenue Canada using the following criteria:

- steady increase in sales

- exhibitions,/presentations engaged in

- amount of time devoted to work

- representation by a dealer or agent

- active promotion of work

- jTevenue received from work

- histerical recerds of annual profits/losses and increased activity

- popularity of work produced (demand)

- type of expenditures claimed in execution of work

- qualifications: education. awards, honours, etc.

- memberships in professional organizations

= stionificance of gross revenue from exportation.

The “expectation of profit" has no time limit: it can take a long time
to realize the profit but there is the “expectation” of one eventually.
To deduct expenses, one must be classified as a “business” as opposed
to “hobbyist”.

Aulletin IT 4504 (¢IT: Interpretation Taxation) defines the above and

can be eobtalned from Revenue Canada Taxation offices. The Department
or Finance makes the laws; Revenue Canada administers them; IT 504
interprets them and, Revenue Canada goes by it. The status of the

artist is a new area of debate currently being tackled, but at present
the artist has no special recognition by the Finance Dept. Hopefully
this will changs to give legal consideration to artists in the Income
Tax Act.

The following changes have recently been made and are recognized by

Fayenue Canada:

In.antory <= (changed thanks to the actions of Toni Onley) can now be
nil at year end.

Treveal Costs - are now considered "research and development” and
deductable, rather than included in cost of product (inventory).

@ifts - can be donated to any organization with "charitable tax status"
with no tam benefit or loss (before were treated as sales and
were taxable). Donations to the Crown are tax deductable.

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