The author writes:
Based on the Tax Court’s finding that Paletta’s trading activity was carried on solely for tax purposes without
any pursuit of profit, the FCA concluded that Paletta’s trading activity could not constitute a source of business
income, and that the Minister was correct in denying his trading losses.
And then quotes from the Court decision:
Whether avoiding one’s tax is viewed as a personal endeavour, a hobby or placed in a category of its own, it is
not a commercial activity pursuant to the test set out in Stewart, and applied in Walls SCC. That said, where the sole purpose of an activity is the avoidance of one’s tax, there is no reason to resort to the Stewart test because such an activity is irreconcilable with the existence of a business. (para. 53)
Ron Dueck “R v The Estate Of Pasquale Paletta 2022 FCA 86—Losses Arising From Activities Undertaken Without A Pursuit Of Profit Are Not Deductible Under Section 9″ Tax Topics 2620 (2022 05 24)