The appellant claimed a substantial capital loss on the disposition of a partnership interest, which it sought to carry back to offset a prior capital gain.
The Minister denied the loss under the general anti-avoidance rule (GAAR).
The Tax Court of Canada found that the series of transactions, which involved bumping the adjusted cost base of the partnership interest using resource properties, created an artificial paper loss without any true economic impoverishment.
The Court held that the transactions abused the capital loss and bump provisions of the Income Tax Act.
The appeal was dismissed.
