Training bond NOT tax deductible !?!

[DeltaHotel]

I got a letter in the mail yesterday saying that the tax deduction I claimed last year for a $10 000 training bond I paid to my ex-employer was denied.

I was always under the impression that a training bond was tax deductible!!!

The letter said that the 10 000$ spent on ''training'' was not spent in an approved education facility ....
It now looks like I'm gonna have to repay the 3200$ I had received in tax return ! FML

Any suggestions ? Please.

[Gannet167]

Where did you get your training?

[CL-Skadoo!]

If it was done a Flight Safety or Simulfight, would it be a write-off? I never realised it was even a possibility.

[ragbagflyer]

I'm sure the company is accounting for cost encurred for employee training as a write off so I don't see why your shouldn't be able to write it off as well.

[Kingairdriver]

You probably claimed it wrong. It is an employment condition, before I paid mine I got my employer to fill out a conditions of employment tax form. It comes off as an employment expense.

[HS-748 2A]

A bond as such, will be repaid by the company after you have met your post-training employment conditions, either in installments or as a lump sum in its entirety, right?

If you claim it as an expense now, you will have to claim it as income when they pay it back. At that point, presumably you'll be in a higher tax bracket.

Alternatively, if you don't stick around and simply skip out on the bond, you should be able to write it all off as training, like a university student claiming their tutition.

'48

[RenegadeAV8R]

You should probably try using the following:

Revenu Quebec - Employment Expenses IN-118-V

Canada Revenue Agency - T4044 Employment Expenses

[DeltaHotel]

Guys I really appreciate your help !! This is good intel.

I've contacted my accountant by email and am now waiting for his reply.
I will let you know.

Again, THANK YOU

[Bede]

I'm sure the company is accounting for cost encurred for employee training as a write off so I don't see why your shouldn't be able to write it off as well.

Because corporations are taxed on net income (bottom line) and individuals are taxed on gross income (top line).

The same reason why a company can deduct the cost of a company vehicle but an individual cannot.

I wrote of my training bond as a professional expense without any problems from the CRA.

[4hrstovegas]

Did anybody actually read the T4044 docs?? You CANNOT deduct a bond as an employment expense, or anything else. If somebody has managed it and it wasn't noticed, it is just that.

Tuition deductions have to be from an accredited educational institution that is authorized to sign off a T2202A.

[PAX]

I got a letter in the mail yesterday saying that the tax deduction I claimed last year for a $10 000 training bond I paid to my ex-employer was denied.

I was always under the impression that a training bond was tax deductible!!!

The letter said that the 10 000$ spent on ''training'' was not spent in an approved education facility ....
It now looks like I'm gonna have to repay the 3200$ I had received in tax return ! FML

Any suggestions ? Please.

Good.

If you pay a training bond you should not only be taxed, but shot as well.

[CL-Skadoo!]

I got a letter in the mail yesterday saying that the tax deduction I claimed last year for a $10 000 training bond I paid to my ex-employer was denied.

I was always under the impression that a training bond was tax deductible!!!

The letter said that the 10 000$ spent on ''training'' was not spent in an approved education facility ....
It now looks like I'm gonna have to repay the 3200$ I had received in tax return ! FML

Any suggestions ? Please.

Good.

If you pay a training bond you should not only be taxed, but shot as well.

A man lives and dies by his word, so if we shoot him, he'll die a better man than you.

[Gorgons]

Perhaps the simplest way to look at this... if you were repayed the upfront money you didn't incur an expense, you weren't out a dime, nothing to claim... What you did was loan the money to your employer so they could "pay" for your training, be careful what you wish for, the CRA might decide that any interest you may have earned on the loan repayment was income and come after you for some more dough! Our worse yet get caught up in some sort of illegal loan debacle...

[DeltaHotel]

**DEVELOPMENT**
I have since spoken to the HR at Pascan Aviation (the company in question) and they will not sign the T2220 because they say the $10000 i paid wasn't for training, it was for transport, hotels, flight safety etc ... I have answered with a copy of my training bond clearly saying that the bond is to guarantee the cost of my TRAINING ...

To be continued

P.S
From T4044 page 7

Training costs – You can deduct the cost of a training course as an employment expense. The course has to maintain, upgrade, or update your existing skills or qualifications that relate to your employment.
You cannot deduct the cost of a training course as an employment expense if the course is for personal reasons, the cost is unreasonable, or you receive a lasting benefit from the course. For example, you receive a lasting benefit when you take a course to get a credit towards a degree, diploma, professional qualification, or similar certificate.

[Gorgons]

Seriously, how does this fly? I'm not an accountant...actually terrible with money. But my simple brain says if I hand somebody $10,000 and they give it back to me over a 12 or 18 month period how can I claim anything, I have not actually incurred any expense. If I'm actually able to claim the deduction for the $10,000 wouldn't I have to then declare the repayments as income and pay the taxes on that? Or do I get to have it both ways?

[PAX]

Seriously, how does this fly? I'm not an accountant...actually terrible with money. But my simple brain says if I hand somebody $10,000 and they give it back to me over a 12 or 18 month period how can I claim anything, I have not actually incurred any expense. If I'm actually able to claim the deduction for the $10,000 wouldn't I have to then declare the repayments as income and pay the taxes on that? Or do I get to have it both ways?

You have to remember that these people paid bonds. They don't think like normal people. 

[DeltaHotel]

To those who think I'm brain-dead because I paid a bond ...

I'm just as against training bonds as u are, if not more. I hate that I had to do it and I agree with you, it's degrading for myself and the profession.

But like most who pay bonds, I was unemployed for 10 months, EI was running out and I needed a job. I do think however it takes a pretty sick person to say I ddeserve to be shot because of it.

Until we have a proper organization that protects our profession and our rights (like the proposed "college of pilots", bonds are going to continue AND get more expensive. Small operators thrive on young guys who are only trying to make a descent living and carry out an honest career. Somehow the operators have convinced everybody that it's not their responsibility to train pilots to fly their types of airplanes.

Young pilots are at the mercy of crooked, cheap and dishonest operators like my previous employer and I sure hope it changes for the future generations.

Cheers

[mmartin1872]

Just to play devils Advocate. Pilots who go to small operators looking to "climb the ladder" have also made the "training bonds". You think the training is free for the employer. It still costs the employer lets just say minimum 5 hours of training, to get you flying. in the rotary world on a simple 206 thats still $xxx per hour, if the 'boss' flys you. if he has a training pilot, you are looking at the helicopter flying around non-rev for 5 hours at $900+/hr. all the components still cost the employer money. You go and get type certified, promise that you are going to stick around for 2 years, and you just want to be around helicopters/airplanes. As soon as your good to go, ppc'd up, and type certified up, you are looking over the fence at someone else and saying 'hey i can fly for you' just pay me $$$ and I'll be there (now the employer has just subsidized his competitors training). Next thing you know, the pilot is gone, and another 100hr/500hr/800hr pilot is at the door saying the exact same thing. You give him the benefit of the doubt, train him up, and he jumps ship. You invest the money into your employees, with out any 'paper' saying they have to be there for 2 years, and then you have that paper and it's still useless, and not worth going to court over. It's only so long before either you start thinking either 'training bond' or 'screw hiring on employees that are less than 1000hr type trained up.'

Not that i agree with 'training bonds', i just see 'why' they are there, from the 'other side'. I wish that a mans word was good enough, and also that the 'employers word' was good enough. But as long as people want to climb the ladder, and

[WetJet]

If you pay a training bond you should not only be taxed, but shot as well.

Really mods? You let a spineless 3-post-wonder who probably has another Avcanada handle say shit like this?
Weak.

Why is it that posts like this stay, but posts about the operator in YTZ who is a convicted child rapist never hang around?

I don't mean to hijack, but C'mon Man!

[sstaurus]

If you pay a training bond you should not only be taxed, but shot as well.

Really mods? You let a spineless 3-post-wonder who probably has another Avcanada handle say shit like this?
Weak.

Why is it that posts like this stay, but posts about the operator in YTZ who is a convicted child rapist never hang around?

I don't mean to hijack, but C'mon Man!

+1

[PAX]

If you pay a training bond you should not only be taxed, but shot as well.

Really mods? You let a spineless 3-post-wonder who probably has another Avcanada handle say shit like this?
Weak.

Why is it that posts like this stay, but posts about the operator in YTZ who is a convicted child rapist never hang around?

I don't mean to hijack, but C'mon Man!

Lighten up. Do you really think I am serious about shooting someone that pays a bond? It was a joke; you need to get a sense of humour. I am against bonds, no one should have to pay them. If we all said no then they would disappear. I sympathize with Deltahotel’s situation but I still would not have paid a bond if it was me. I would rather dig shit for a living than bring myself to fork out money for a bond.

As for having only 3 post’s. I do not have another Avcanada handle I just don’t spend all my time posting on Avcanada. Would you respect me more if I had 288 posts? Maybe I will get a life and spend more time posting here. When I get over 100 posts maybe we can be Facebook friends.

Just to play devils Advocate. Pilots who go to small operators looking to "climb the ladder" have also made the "training bonds". You think the training is free for the employer. It still costs the employer lets just say minimum 5 hours of training, to get you flying. in the rotary world on a simple 206 thats still $xxx per hour, if the 'boss' flys you. if he has a training pilot, you are looking at the helicopter flying around non-rev for 5 hours at $900+/hr. all the components still cost the employer money. You go and get type certified, promise that you are going to stick around for 2 years, and you just want to be around helicopters/airplanes. As soon as your good to go, ppc'd up, and type certified up, you are looking over the fence at someone else and saying 'hey i can fly for you' just pay me $$$ and I'll be there (now the employer has just subsidized his competitors training). Next thing you know, the pilot is gone, and another 100hr/500hr/800hr pilot is at the door saying the exact same thing. You give him the benefit of the doubt, train him up, and he jumps ship. You invest the money into your employees, with out any 'paper' saying they have to be there for 2 years, and then you have that paper and it's still useless, and not worth going to court over. It's only so long before either you start thinking either 'training bond' or 'screw hiring on employees that are less than 1000hr type trained up.'

Not that i agree with 'training bonds', i just see 'why' they are there, from the 'other side'. I wish that a mans word was good enough, and also that the 'employers word' was good enough. But as long as people want to climb the ladder, and

If you pay your employees well and treat them good then most would stay true to their word.

[Hawkerflyer]

Fact is training bonds exist because of people like this. As simple as that.

[LousyFisherman]

At the risk of thread drift

If you pay your employees well and treat them good then most would stay true to their word.

If you pay your employees well and treat them good and you get extremely lucky when there is a
blue moon then the odd one would stay true to their word.

FTFY

And that is all business not just aviation.

As to the original question, of course it is not tax deductible, it is an investment.
Does it pay interest? It should, even if a trivial amount. And you will have to pay tax on the interest.
Are you allowed to put it in your RRSP? Or even better can you put it one of these new TFSAs?

LF

[flyhigh-dude]

If pascan says that training bonds are used to pay for simulators cost, training, hotels and expenses related to that (probably for the Ba32)...why is it that a simple F/O on a pilatus has the same training bond amount???
I wonder what the HR's explanation would be....

[DeltaHotel]

I filled an opposition for my case back in december. I got a call from my appointed person at the Can Revenue Agency, they studied my case and a lot a similar ones (my ex collegues) and they have denied my opposition - I will have to reimburse $1200.

They gave me the choice of going to ''income tax court''.
I dont know if I will ... we'll see