Convention Expenses - Yes you can go to Hawaii

I have previously written about accountants, and how not all are created equal.  Designations aside, there are good and bad in every discipline.  CA, CGA, CMA, none designated, it really doesn’t matter.  It all comes down to experience, training and willingness to listen to the client.
 
I got a call from a colleague the other day and she had a question about training and convention expense.  So here comes the story.  The client had three conventions and seminars that she attended.  One was in Banff, one in Hawaii, and one in Phoenix.  The accountant that the client went to was only going to claim the one in Banff.   I know my CRA auditor spidey senses started tingling when Hawaii and Phoenix were mentioned, but then I started asking questions.

1.  How much time was spent in actual conferences compared to time spent in the location?
2. Is there a convention itinerary showing what time was spent in “training”? Documentation?

Depending on the answers to these questions we can determine how much of the trip is a valid expense.
The simple point is that deductibility is all based on how much personal use, if any, there is.In the case of the client there was no personal component.She was in Hawaii and Phoenix the same length of time as the conferences were on for.Therefore it is not unreasonable to conclude that the primary purpose of the trips was business related.Further, this illustrates nicely that just because a conference is held in an exotic vacation spot, it does not mean that there is no business purpose.That said I will bet anyone $10 that you will have to fight hard with CRA and have really good documentation before they are going to let you deduct a trip to Hawaii.
 
Now, there are a few more relevant points that can be made.Let’s suppose that the conferences were 4 days and the client stayed 10 days.The deductible portion of the trip should be 40%.There is also nothing wrong with bringing the family, but you just can’t deduct the expense of bringing them along.
 
Don’t let the CRA scare you away from going places for conferences or training if you want to or need to go.Don’t let them scare you away from taking the family with you.Just make sure that you have really good documentation to support what part of the trip was business, and what part was personal.
 
The above information is really just common sense, however a lot of accountants, and pretty much every auditor will try to tell you that a trip to Hawaii is not deductible EVER.The truth is that the simple facts stated above must be used in determining what portion is deductible.Nowhere in the Income Tax Act does it say trips to Hawaii are not allowed.Remember, all an expense needs in order to be deductible is verifiable documentation, and a valid (I repeat VALID) business purpose.