The CRA has confirmed that a deemed disposition under subsection 45(1) of the Income Tax Act resulting from a change in use is not a disposition for the purposes of the flipping rules in subsections 12(12) and 12(13). See 2024-1027831C6.
Adventures in trade
In Rudolph v R, 2024 TCC 148, the Court determined that gains and losses realized by the taxpayer on the sale of shares and the expiry of related options were on income account. The Court noted, among other things, that…
Source of income
In Stackhouse v R, 2023 TCC 156, Owen J carefully considered comments in Brown v Canada, 2022 FCA 200, and found that they improperly intepreted the test used in Canada v Paletta, 2022 FCA 86, for determining whether a source…
Rental operation as a business
A trust owned and leased commercial buildings and offered certain services to tenants of the buildings, namely electricity, heating, water, maintenance, cleaning and security services. The CRA stated that the trust could be considered to be carrying on a business…
File storage fees
Retired, or soon-to-be retired, lawyers will be happy to know that Hamilton’s own Justice Bocock has held that fees paid for file storage by a retired lawyer are deductible even though the lawyer is no longer earning business income. Sounds…
Flipping out
You buy a vacant lot, build a home on it, move into the home for a few weeks and then you sell the home for a tidy profit very soon thereafter. You claim the principal residence exemption (the PRE) so…
WIP for pros
Neil Armstrong notes that the CRA believes that WIP under contingent fee arrangements is not income for the purposes of the Income Tax Act until the client receives amounts under a settlement or court order (when the liability of the…
Corporate gifts
Neal Armstrong reports that the Quebec Court of Appeal, in Emballages Starflex Inc. v Agence du revenu du Québec, 2016 QCCA 1856, has held that a corporation cannot deduct a gift to a charity as a business or promotional expense.…
Property vs business income
From Philip Friedlan and Adam Friedlan, “When Does the Operation of a Rental Property Become a Business?” Tax for the Owner-Manager 16:2 (April 2016): , which was decided under the informal procedure rules and has…