Cases
Inwest Investments Ltd. v. The Queen, 2015 BCSC 1375
The filing position of the taxpayer (Wesbild), that it did not have a permanent establishment in B.C., was based on an application of the Marconi...
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| Tax Topics - Income Tax Act - Section 152 - Subsection 152(4) - Paragraph 152(4)(a) - Subparagraph 152(4)(a)(i) | reasonable filing position position cannot be a “misrepresentation” | 508 |
| Tax Topics - Income Tax Act - Section 232 - Subsection 232(1) - Solicitor-Client Privilege | not necessary to provide legal opinion to rely on having consulted legal counsel | 215 |
| Tax Topics - Income Tax Regulations - Regulation 400 - Subsection 400(2) | no fixed place of “business” if no source of business income | 165 |
| Tax Topics - Statutory Interpretation - French and English Version | "misrepresentation" informed by narrower French version | 103 |
2529-1915 Québec Inc. v. Canada, 2009 DTC 5023 [at 5585], 2008 FCA 398
The two individual taxpayers devised a scheme to: generate artificial capital gains of $110 million in some home-grown companies; pay the...
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| Tax Topics - General Concepts - Sham | capital dividend elections for distributions of what should have been known to be income-account gains were shams | 266 |
| Tax Topics - General Concepts - Tax Avoidance | capital dividend elections for distributions of what should have been known to be income-account gains were shams | 266 |
| Tax Topics - Income Tax Act - Section 83 - Subsection 83(2) | capital dividend elections for distributions of what should have been known to be income-account gains were shams | 718 |
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Shares | shares acquired for immediate resale as part of capital dividend account generation scheme were on income account | 177 |
| Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business | shares premiums received for marketing tax scheme were business income | 223 |
Hammill v. Canada, 2005 DTC 5397, 2005 FCA 252
The taxpayer purchased gems for an amount in excess of their worth, and then paid a total of $1,651,766 in charges purportedly made to secure a...
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| Tax Topics - Income Tax Act - Section 3 - Business Source/Reasonable Expectation of Profit | 154 | |
| Tax Topics - Income Tax Act - Section 67 | 108 |
Partridge v. Canada, 2003 DTC 5175, 2003 FCA 91 (FCA)
The Tax Court Judge did not commit a reviewable error when he found that the taxpayer's activities lacked commercial flavour and that the taxpayer...
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| Tax Topics - Income Tax Act - Section 3 - Business Source/Reasonable Expectation of Profit | 54 |
Stewart v. Canada, 2002 DTC 6969, 2002 SCC 46, [2002] 2 S.C.R. 645
Before going on to find that rental condominium units of the taxpayer represented a source of income and that it was not necessary for the...
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| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) | not tainted by capital gains motivation | 115 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Personal or Living Expenses | 12 | |
| Tax Topics - Income Tax Act - Section 3 - Business Source/Reasonable Expectation of Profit | no reasonable expectation of profit test if no personal element | 86 |
| Tax Topics - Statutory Interpretation - Ordinary Meaning | avoid judicial rule-making | 80 |
Hudon v. Canada, 2001 DTC 5630, 2001 FCA 320
In the years in question a corporation which owned forest concessions and rights to develop the hydro electric potential of a river was engaged in...
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| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(1) - Qualified Small Business Corporation Share | start-up negotiations | 129 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Small Business Corporation | 129 |
Timmins v. The Queen, 99 DTC 5494 (FCA)
The taxpayer was employed by the New Brunswick Department of Agriculture and Rural Development to assist in establishing and administering several...
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| Tax Topics - Income Tax Act - Section 122.3 - Subsection 122.3(1) | 161 |
The Queen v. Canada Trustco Mortgage Co., 99 DTC 5094 (FCTD)
In its 1984 taxation year, a controlled foreign affiliate of the taxpayer ("B.V.") earned interest on a promissory note that B.V. had acquired...
Loewen v. The Queen, 94 DTC 6265 (FCA)
Before finding that the gain realized by the taxpayer on the redemption of an SRTC debenture was received on income account, Hugessen J.A. noted...
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| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Loans | 150 |
R. v. Fogazzi, 92 DTC 6421 (Ont. C.J. (G.D.)), rev'd 93 DTC 5183 (Ont. CA)
Before going on to find that the misappropriation by the accused of money received from Italian relatives did not give rise to income from an...
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| Tax Topics - Income Tax Act - Section 239 - Subsection 239(1) - Paragraph 239(1)(d) | 89 | |
| Tax Topics - Income Tax Act - Section 3 | 103 | |
| Tax Topics - Income Tax Act - Section 9 - Timing | 40 |
Quirinus C. Van Dongen v. Her Majesty The Queen, 90 DTC 6633, [1991] 1 CTC 86 (FCTD)
In finding that the taxpayer did not acquire two real estate properties in connection with an adventure in the nature of trade, Cullen J. stated...
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| Tax Topics - Income Tax Act - Section 10 - Subsection 10(1) | 87 |
Levy v. The Queen, 90 DTC 6346 (FCTD)
In rejecting a submission that the taxpayer's income from a horse racing syndicate was income from property rather than business income because...
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Farming | included breeding | 65 |
| Tax Topics - Income Tax Act - Section 31 - Subsection 31(1) | 68 | |
| Tax Topics - Income Tax Act - Section 96 | 122 |
Pollock v. The Queen, 90 DTC 6142 (FCTD), aff'd 94 DTC 6050 (FCA)
Taxpayer's counsel unsuccessfully submitted that because the definition of "business" specifically excluded an office or employment, the...
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| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Shares | 148 |
Ward v. The Queen, 88 DTC 6212, [1988] 1 CTC 336 (FCTD)
"The term 'business' by definition includes an adventure in the nature of trade but it is not synonymous with carrying on a business. This latter...
Alberta Institute on Mental Retardation v. The Queen, 87 DTC 5306, [1987] 2 CTC 70 (FCA)
"I do not think that the association of a charitable organization with a commercial enterprise necessarily impresses that charitable organization...
Happy Valley Farms Ltd. v. The Queen, 86 DTC 6421, [1986] 2 CTC 259 (FCTD)
In determining "when a transaction, which is not itself a trade or business, can be held to be 'an adventure or concern in the nature of trade'...
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| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Real Estate | farmland gain of real estate developer | 71 |
Mele v. The Queen, 85 DTC 5192, [1985] 1 CTC 257 (FCTD)
The objects in the articles of incorporation of a company indicated that it was not in the business of lending money.
The Queen v. Manley, 85 DTC 5150, [1985] 1 CTC 186 (FCA)
The taxpayer engaged in an adventure or concern in the nature of trade when he agreed with an individual ("Levy") to find a purchaser for the...
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| Tax Topics - Income Tax Act - Section 5 - Subsection 5(1) | 59 | |
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | 85 | |
| Tax Topics - Statutory Interpretation - Resolving Ambiguity | 76 |
Canadian Marconi Co. v. The Queen, 84 DTC 6267, [1984] CTC 319 (FCA), rev'd 86 DTC 6526, [1986] 2 CTC 465, [1986] 2 S.C.R. 522
"[F]or purposes of the Income Tax Act, the fact that an activity is engaged in for the purpose of making a profit cannot be decisive of the...
Hillsdale Shopping Centre Ltd. v. The Queen, 81 DTC 5261, [1981] CTC 322 (FCA)
"[T]he restricted nature of the corporate powers of the taxpayer ... is a fact but it is not a critical one in determining liability for tax. The...
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| Tax Topics - General Concepts - Onus | 73 | |
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Options | 86 |
Gillis v. The Queen, 78 DTC 6103, [1978] CTC 44 (FCTD)
In order for an undertaking to be considered a "business" it must be carried on with a reasonable expectation of profit. Dubinsky, DJ stated (at...
M.R.T. Investments Ltd. v. The Queen, 75 DTC 5224, [1975] CTC 354 (FCTD), aff'd 76 DTC 5156 (FCA)
The corporation, whose sole activity was to acquire mortgages of sub-prime mortgagees, and which at the beginning of the taxation year in question...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Start-Up and Liquidation Costs | 33 |
MNR v. Mandelbaum, 62 DTC 1093 (Ex Ct)
In finding that the purchase by individual shareholders of a company of mortgage receivables and conditional sales contracts owing to that company...
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| Tax Topics - Income Tax Act - Section 16 - Subsection 16(1) | no-application where mortgage receivables on income account | 156 |
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Loans | 239 |
Drumheller v. MNR, 59 DTC 1177, [1959] CTC 275, 59 DTC 1177 (Ex Ct)
The taxpayer, who orally agreed with his brother-in-law to jointly seek a franchise to supply a town with natural gas, received $10,000 in lieu of...
MNR v. Taylor, 56 DTC 1125, [1956] CTC 189 (Ex Ct)
A transaction whereby the taxpayer purchased lead and resold it to his employer at a gain was an adventure in the nature of trade -...
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| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Commodities, and commodities futures and derivatives | executive's substantial lead purchase with view to resale to employer/meaning of adventure | 167 |
C.I.R. v. Marine Steam Turbine Co. Ltd. (1919), 12 TC 174 (K.B.D.)
"'Business' is a very wide word, and it is a wide elastic word in its extent, of course, but it has two distinct meanings. It may mean any...
See Also
Mazo v. The Queen, 2016 TCC 232 (Informal Procedure)
The taxpayer (Ms. Mazo) participated in and profited on balance from a pyramid scheme, which in form entailed the participants paying the promoter...
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| Tax Topics - Income Tax Act - Section 9 - Timing | revenue earned when credited to taxpayer's account with promoter | 218 |
| Tax Topics - Income Tax Act - Section 3 - Business Source/Reasonable Expectation of Profit | pyramid scheme a source of business income | 92 |
Staltari v. The Queen, 2015 DTC 1130 [at 818], 2015 TCC 123
The taxpayer donated land to the City of Ottawa, received a charitable receipt for its appraised value and claimed that his gain resulting under...
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| Tax Topics - General Concepts - Evidence | uncorroborated testimony | 99 |
| Tax Topics - Income Tax Act - Section 38 - Paragraph 38(a.2) | land donated in order to achieve tax benefit was still a gift to a qualified donee | 133 |
| Tax Topics - Income Tax Act - Section 39 - Subsection 39(1) - Paragraph 39(1)(a) | exclusion of gains that are ordinary income | 149 |
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Real Estate | secondary intention to develop land irrelevant if land donated instead | 500 |
Prochuk v. The Queen, 2014 DTC 1050 [at 2917], 2014 TCC 17
The taxpayer, whose principal source of income was his RRSP, received distributions of $63,750 on an investment made outside his RRSP in a...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Loss v. Loss | trading RRSP funds does not make the annuitant a trader | 116 |
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Shares | trading RRSP funds does not make the annuitant a trader | 116 |
Eclipse Film Partners (No. 35) LLP v Revenue and Customs Commissioners, [2014] BTC 503, [2013] UKUT 0639 (TCC), aff'd [2015] EWCA Civ 95
Before affirming a finding below that the appellant partnership, which had been licensed rights to exploit two films, was not carrying on a trade...
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| Tax Topics - Statutory Interpretation - Consolidations | construed in integrated manner | 146 |
| Tax Topics - Statutory Interpretation - Hansard, explanatory notes, etc. | Explanatory Notes more valuable than white papers | 222 |
Leblanc v. The Queen, 2007 DTC 307, 2006 TCC 680
The two taxpayers, who together won over $5.5 million during a four year period from playing sports lottery parlay games, were found to not be...
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| Tax Topics - Income Tax Act - Section 3 - Business Source/Reasonable Expectation of Profit | compulsive gamblers rather than professionals | 151 |
| Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business | compulsive gamblers rather than professionals | 151 |
| Tax Topics - Income Tax Act - Section 9 - Expense Reimbursement | 151 |
Wadley v. The Queen, 2006 DTC 3401, 2006 TCC 440 (Informal Procedure)
The taxpayer let her neighbour's cattle graze on her pasture in consideration for a monthly fee per head, and agreed with her neighbour that he...
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| Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Business | 159 |
Aviva Canada Inc. formerly CGU Group Canada Ltd. v. The Queen, 2006 TCC 57
In settling a dispute between the appellant and another insurance company, Canadian Group Underwriters Insurance Company ("Underwriters"), as to...
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| Tax Topics - Excise Tax Act - Section 141.1 - Paragraph 141.1(2)(<em>a</em>) | purchase and immediate resale at the same FMV was not commercial activity | 219 |
| Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Commercial Activity | purchase and immediate resale at the same FMV was not commercial activity | 209 |
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Trademarks | purchase and immediate resale at the same FMV was not an adventure | 286 |
Richter & Associates Inc v. The Queen, 2005 TCC 92
The trustee in bankruptcy for a company ("Castor") which had essentially only engaged in investing in high-yield loans brought an action in its...
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| Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Business | litigation support services provided by trustee for bankrupt financial institution were an "undertaking" | 289 |
| Tax Topics - Excise Tax Act - Section 141.01 - Subsection 141.01(2) | allocation between costs incurred by trustee in bankruptcy for bankrupt financial institution to provide litigation services to creditors, and costs incurred in connection with its action qua trustee | 392 |
| Tax Topics - Excise Tax Act - Section 141.01 - Subsection 141.01(5) | allocation between own suit and litigation support | 77 |
| Tax Topics - Excise Tax Act - Section 141.1 - Paragraph 141.1(3)(b) | action brought by trustee for bankrupt financial institution deemed to be not in course of commercial activity | 200 |
| Tax Topics - Excise Tax Act - Section 265 - Subsection 265(1) - Paragraph 265(1)(f) | trustee's own suit and litigation support activity were related | 295 |
| Tax Topics - General Concepts - Illegality | Act applied to what has occurred irrespective of legality | 145 |
Rocovitis v. Dominion of Canada General Insurance Co. (2005), 63 OR (3d) 402 (CA)
An exclusion in an insurance policy for loss resulting from engaging in a "trade, profession or occupation" did not apply to an individual doing...
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| Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business | odd jobs not a business | 42 |
| Tax Topics - Income Tax Act - Section 9 - Expense Reimbursement | 42 |
Wright v. The Queen, 2003 DTC 763 (TCC)
The taxpayers and their father had used 430 acres of a 5,700 acre property in Manitoba for farming for many years before farming ceased in the...
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| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(g) | 173 | |
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Commodities, and commodities futures and derivatives | sale of timber from former farm on capital account | 118 |
Banner Pharmacaps NRO Ltd. v. The Queen, 2003 DTC 245, 2003 TCC 82, aff'd 2003 FCA 367, 2003 DTC 5642
The taxpayer was not considered to be engaged in a business of making loans by virtue of the Canadian corporation of which it was a sole...
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| Tax Topics - Income Tax Act - Section 9 - Timing | 95 |
Yunger v. The Queen, 2000 DTC 2153 (TCC)
Before going on to find that the taxpayer had not made three loans in the ordinary course of a business of lending money, for purposes of s....
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| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(p) - Subparagraph 20(1)(p)(ii) | 3 loans lacked continuity | 110 |
Waxman v. The Queen, 97 DTC 705 (TCC)
Archambault TCJ. indicated that if the issue had been raised before him, he would have been inclined to doubt that a partnership that was engaged...
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| Tax Topics - Income Tax Act - Section 37 - Subsection 37(8) | 108 |
Samson et Fréres Ltée v. The Queen, 97 DTC 642 (TCC)
After finding that expenses incurred by the taxpayer were non-deductible because it had not yet commenced to carry on a business, Dussault TCJ....
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Start-Up and Liquidation Costs | 130 |
Toronto Stock Exchange v. Regional Assessment Commissioner (1996), 136 DLR (4th) 362 (Ont CA)
The Toronto Stock Exchange, which was a corporation without share capital and whose objects were to operate an exchange for trading in securities...
Re City of Calgary and Alberta Assessment Appeal Board (1989), 62 DLR (4th) 764 (Alta. C.A.)
The Calgary Real Estate Board Co-operative Limited was found not to be a "business" for purposes of the Municipal Taxation Act (Alberta), which...
Atkinson v. Dancer, [1988] BTC 364 (Ch.D.)
The test to be applied in determining whether a transaction was the sale of a business or part of a business was whether the transaction caused a...
Marson v. Morton, [1986] BTC 377 (Ch. D.)
Before finding that an isolated transaction, whereby individuals bought undeveloped land and sold it three months later at a substantial gain, was...
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| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Real Estate | 149 |
Re Ontario Jockey Club and City of Toronto (1986), 53 OR (2d) 151 (HCJ.), aff'd (1988), 61 OR (2d) 131 (Div. Ct.)
The predominant purpose of a non-profit corporation without share capital, which operated horse-racing properties and applied substantial profits...
Commissioners of Customs and Excise v. The Rt. Hon. Lord Fisher, [1981] T.R. 59 (HC)
Lord Fisher invited his hunting friends and relations to shoot pheasants on his estate each year, and required a "contribution" from those who...
American Leaf Blending Co. Spn. Bht. v. Director-General of Inland Revenue, [1979] A.C. 676 (PC)
After referring to dicta in the Salisbury House case, [1930] A.C. 432 to the effect that the letting of land does not constitute a "trade", Lord...
Wisdom v. Chamberlain (1968), 45 TC 92 (C.A.)
In finding that a gain resulting from the purchase of silver by the U.K. taxpayer in order to hedge against a devaluation of the pound was...
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| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Commodities, and commodities futures and derivatives | purpose for silver purchase was to profit from devaluation | 184 |
Guinea Airways Ltd. v. Federal Commissioner of Taxation (1949), 83 C.L.R. 584 (HC of A.)
Before finding that a stock of spare parts held in order to meet possible future emergencies were capital assets rather than stock in trade, Kitto...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Loss v. Loss | 39 |
Martin v. Lowry, [1926] K.B.D. (C.A.)
A venture in which a wholesale machinery merchant purchased in 1919 the whole surplus stock of government aircraft linen remaining in the...
Administrative Policy
S3-F9-C1 - Lottery Winnings, Miscellaneous Receipts, and Income (and Losses) from Crime
Gambling profits
1.11
Profits derived from bookmaking or from the operation of any gambling establishment (carried on legally or otherwise) constitute income from...
Income Tax Technical News, No. 41, 23 December 2009
"Meaning of Business": Discussion of determination as to whether gambling is a business.
31 January 2007 External T.I. 2006-0213111E5 - RRIF TRUST - CARRYING ON A BUSINESS
After stating that "it is our general view that any undertaking or activity of a taxpayer that is carried on for profit or with a reasonable...
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| Tax Topics - Income Tax Act - Section 146.3 - Subsection 146.3(3) - Paragraph 146.3(3)(c) | 69 |
Policy Statement CPS-019 "What is a Related Business?" 31 March 2003
Although most fundraising activities are business activities, a fundraising event generally will not be considered to "recur with such regularity...
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| Tax Topics - Income Tax Act - Section 149.1 - Subsection 149.1(1) - Related Business | 142 |
1996 A.P.F.F. Round Table No. 7M12910 (Item 4.1.1)
Discussion of the distinction between a business and an adventure in the nature of trade.
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| Tax Topics - Income Tax Act - Section 10 - Subsection 10(1) | 15 |
8 March 1990 T.I. (August 1990 Access Letter, ¶1379)
Engaging in an adventure in the nature of trade is not ipso facto carrying on a business.
89 M.R.T. - Q.15 (Jan. 90 A.L.)
In determining whether term deposits of a corporation which are required as collateral to obtain a line of credit are used in an active business,...
Articles
Krishna, "What Constitutes a Business?", Canadian Current Tax, June 1995, Vol. 5, No. 9, p. 90.
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose | 0 |