Line 164 - Business income

Line 164 - Business income

If you carried on a business in 2024, use Schedule L to report your gross income and your net income (or net loss), calculated according to the accrual method. However, if you are a farmer, a fisher or a person who earns commissions, you can use the cash method to calculate your net income.

Supporting documents

With your return, enclose either form TP-80-V, Business or Professional Income and Expenses, or your financial statements. If you carried on more than one business, you must submit a separate form or separate statements for each business. If your income was derived from farming or fishing, enclose your financial statements.

Fiscal period

As a rule, sole proprietorships and partnerships are required to report their income on the basis of a fiscal period ending on December 31. If your or your partnership's fiscal period ends on a different date, see guide IN-155-V, Business and Professional Income, and complete form TP-80.1-V, Calculation of Business or Professional Income, Adjusted to December 31. Enclose the form with your return.

Business loss

If your business sustained a loss, enter the amount of the loss, preceded by a minus sign (-), on the appropriate line of Schedule L. As a rule, if this amount is more than the total of your income from other sources, you can use the excess to reduce your income for the previous three years or (in most cases) your income for the next twenty years. If you want to use a loss to reduce your income from previous years, complete form TP-1012.A-V, Carry-Back of a Loss, and file it separately from your return.

Property flipping (home or rental property) [lines 12 and 22 of Schedule L]

If, in 2024, you disposed of (sold, transferred, exchanged, donated, etc.) a residential property (including rental property or a right to purchase) that you owned for less than 365 consecutive days and no life event justified the disposition, we consider that you flipped the property. The profit on the sale is therefore fully taxable as business income.

For more information, go to revenuquebec.ca.

Farming (lines 13 and 23 of Schedule L)

On line 13 of Schedule L, enter the gross income resulting from the operation of a farming business. If you were a member of a partnership, enter the partnership's gross income.

On line 23 of Schedule L, enter the net income (or net loss) resulting from the operation of a farming business. If you were a member of a partnership, enter your share of the net income (or of the net loss). If you were a specified member of a partnership, see "Income from a partnership of which you were a specified member" on the next page.

If you sustained a farm loss, contact us to find out how to calculate it.

Cryptoassets (lines 16.1 and 26.1 of Schedule L)

There may be tax consequences if, as part of your business activities, you:

• exchange or sell cryptoassets on a regular basis by speculating on their value; or

• accept them as payment for the sale of goods or services.

Likewise, there may be tax consequences if you operate a cryptoasset mining business and receive a reward for your services.

If you acquired, held or used cryptoassets in 2024, you must complete a Cryptoasset Return (form TP-21.4.39-V) and file it with your income tax return. Failure to do so may result in penalties.

For more information, see guide IN-155-V, Business and Professional Income.

End-of-career allowance received by a physician (line 28 of Schedule L)

If you are a physician and you received an allowance as part of a program providing end-of-career allowances (provided you did not practise medicine as a self-employed person in 2024), enter the allowance on line 28 of Schedule L. If you received the allowance as a salaried physician, enter it on line 154 instead.

Member of a partnership

If you were a member of a partnership, enter the partnership's gross income and your share of the net income (or of the net loss) in Schedule L. If you were a specified member of a partnership, see "Income from a partnership of which you were a specified member" on the next page.

If you did not receive an RL-15 slip, enclose a copy of the partnership's financial statements or form TP-80-V, Business or Professional Income and Expenses.

Income from a partnership of which you were a retiring partner (line 28 of Schedule L)

Enter the share of a partnership's income or losses that the partnership allocated to you:

• as a retiring partner, for the period in which you were not a member of the partnership; or

• as the surviving spouse of a deceased member of the partnership (provided you were not a member or employee of the partnership and did not carry out any activities on behalf of the partnership). This amount may be shown in box 1-10 of your RL-15 slip.

Income from a partnership of which you were a specified member (line 29 of Schedule L)

Enter your share of the income or losses of a partnership of which you were a specified member. This amount is shown in box 1 of your RL-15 slip if the code "0" or "1" appears in box 40 of the slip.

If, on line 29 of Schedule L, you enter a loss from a partnership of which you were a specified member, see the instructions for line 260 and complete Schedule N.

If you did not receive an RL-15 slip, enclose a copy of the partnership's financial statements. Enter your share of the partnership's income, excluding any amounts you can report elsewhere in your income tax return.

Commissions you received from a business in the years following the end of its operations (line 30 of Schedule L)

Enter commissions you received from a business in the years following the end of its operations on line 30 of Schedule L, instead of on line 26. You are not required to pay the Québec Pension Plan (QPP) contribution or the Québec parental insurance plan (QPIP) premium on this amount.

Note that any commissions owed to you while you operated your business that were not paid in the year you ceased operations must be entered on line 26 of Schedule L.

Insurable earnings (QPIP) and pensionable earnings (QPP) of a person responsible for a family-type resource or an intermediate resource (line 40 of Schedule L)

If you received an RL-29 slip, enter on line 40 of Schedule L the amount of your insurable earnings and pensionable earnings (calculated in form LM-53-V, Insurable Earnings Under the QPIP and Pensionable Earnings Under the QPP of a Person Responsible for a Family-Type Resource or an Intermediate Resource, which you must enclose with your return). This amount will be used to determine your Québec Pension Plan (QPP) contribution and Québec parental insurance plan (QPIP) premium on income from self-employment. For more information, see the instructions for line 439 and Schedule U.

Other amounts to include in your business income

You must include the following in your business income:

• amounts received as a result of a disaster (see guide IN-125-V, The Tax Effects of Financial Assistance Received as a Result of a Disaster);

• government payments shown on the RL-27 slip;

• investments entitling you to certain tax benefits.

Professional dues

In calculating your business income, do not take into account professional dues paid to maintain your professional status, dues paid to a recognized artists' association or the contribution paid to the Office des professions du Québec. However, these amounts entitle you to a tax credit. See the instructions for line 397.

Labour costs

If you incurred labour costs (other than salaries and wages paid to your employees), you must provide information about every person or business that carried out work for any of the following purposes:

• maintaining, repairing or renovating a building from which you earned rental income, or a building that you owned and where you operated a business;

• maintaining, repairing or renovating commercial premises you rented; or

• maintaining land from which you earned rental income.

Complete form TP-1086.R.23.12-V, Costs Incurred for Work on an Immovable, and enclose it with your return. If you do not provide the required information, you are liable to a penalty.

5