In Twomey v R, 2012 TCC 310, the taxpayer thought he had been issued 100 Common Shares in the capital of a corporation, but the minute book indicated he had received only one. The difference mattered: whether the taxpayer could claim the capital gain deduction depended on him holding 100 shares. The corporation and its shareholders “rectified” the minute book by issuing 99 shares to the taxpayer for no consideration. The court held that the taxpayer should be considered to have held 100 Common Shares because the corporation’s general ledger, financial statements and tax returns, all prepared soon after incorporation, indicated that the taxpayer held 100 shares.
