The appellant appealed reassessments for the 2007, 2008, 2009, 2011, and 2012 taxation years regarding the sale of five houses.
The Minister denied the principal residence exemption, treating the gains as business income, reassessed the 2007-2009 years beyond the normal reassessment period, and imposed gross negligence penalties.
The Tax Court allowed the appeal in part.
The Court held the Minister could not reassess the 2007-2009 years as the appellant did not make a misrepresentation attributable to neglect, carelessness, or wilful default, having relied on his accountant's advice.
However, for the 2011 and 2012 sales, the Court found the appellant's primary or secondary intention was to resell at a profit, making them adventures in the nature of trade taxable as business income.
The Court allowed additional expenses for the 2011 and 2012 properties and waived all gross negligence penalties, finding the appellant's reliance on his accountant was reasonable.
