McPherson v. The Queen, 2006 TCC 648, is yet another tax shelter/donation case that has turned out badly for the donor, so far at least (the case is under appeal).
A useful tool
The Web contains many useful tools for lawyers such as the website of the Canadian Legal Information Institute (CanLII), which provides access to a wealth of statutes and cases. The Web has many other useful tools of course.
OBCA Amendments
In a post I wrote about stock dividends last fall, I mentioned that the Ontario government had tabled a bill to amend the Business Corporations Act to clarify that a nominal amount could be added to the stated capital of shares issued in satisfaction of a dividend.
Damage control
The Minister of Finance tries to explain his position on income trusts and the problems created by his announcement on Halloween, 2006.
Hammill
The Supreme Court recently refused leave to appeal to the taxpayer in Hammill v. The Queen, 2005 FCA 252. I wrote about this case here.
Case update
On February 1, I will be speaking to the CRA practitioner’s group at the Royal Botanical Gardens about “Tax Cases of Interest”. I have written here about all of the cases on which I will present. The following table lists the cases together with some notes on their current status:
Salary to children
Bradley v. The Queen, 2006 TCC 500, is something of a surprise. The appellant paid salaries to her young children and attempted to deduct them. The CRA reassessed, and the Tax Court upheld the reassessment because, in the Court’s view, the appellant never really paid anything to the children. She merely deposited amounts to “in trust” accounts for the children over which the appellant had complete control.
PC trouble
In Morisset c. La Reine, 2006 CCI 483 (French only), the CRA reassessed the taxpayer to include in his income amounts supposedly earned by his “professional corporation”. The taxpayer, at law, was not permitted to share the revenue derived from…
Damages again
Valley Equipment Limited v. The Queen, 2006 TCC 510, is interesting reading in light of Bourgault Industries Ltd. v. The Queen, 2006 TCC 449. In Valley Equipment, the Tax Court judge stated that there was no need to resort to…
Salary and shareholder loan accounts
In Irmen v. The Queen, 2006 TCC 475, the taxpayer, a shareholder and key employee of a corporation, received amounts from the corporation throughout the taxation year. During the year, the corporation accounted for the amounts as salary, and CPP and tax was deducted and remitted. At the end of the year, however, the taxpayer and his accountant decided that he should really have taken amounts from the corporation as a draw on his shareholder loan. Adjusting entries were made accordingly, and the taxpayer reported only a small amount as employment income in the taxation year. The CRA, however, reassessed the taxpayer as if he had received salary and not a draw on his shareholder loan.