Whitney Dunn

The Appellant appealed a reassessment that included approximately $10.1 million in its taxable income under subsection 103(1) of the Income Tax Act.

The income was realized by a partnership on the sale of condominium units.

The partnership had allocated 95% of its income to a loss company that joined the partnership just before its year-end.

The Tax Court of Canada found that the allocation to the loss company was unreasonable and that the Minister's allocation of the vast majority of the profit to the Appellant, the only partner who actively participated in the project, was reasonable.

The appeal was dismissed with costs.

The Appellants brought a Rule 58 application to determine a question of law regarding the timing of when two corporations are considered "connected" for the purposes of Part IV tax under paragraph 186(1)(a) of the Income Tax Act, in circumstances where a trust designates a taxable dividend to a corporate beneficiary under subsection 104(19).

The Tax Court held that the determination of whether the payer corporation is connected with the beneficiary is made at the time the taxable dividend was actually received by the trust, provided the beneficiary is deemed to have received the amount in the same taxation year.

If deemed received in a subsequent taxation year, the determination is made in that subsequent year.

The appellant credit union appealed assessments requiring it to collect and remit GST on fees received for services provided to mutual fund and securities dealers.

The Tax Court of Canada allowed the appeal, finding that the services provided were not merely preparatory in nature.

The predominant element of the single compound supply was arranging for the sale of financial instruments, which qualifies as an exempt financial service under the Excise Tax Act.

The Appellant, a mining contractor, acquired shares in junior mining companies to secure mining contracts.

The joint initiatives failed, and the Appellant sold the shares at a loss, which it deducted on income account.

The Minister reassessed the losses as capital losses and superficial losses.

The Tax Court of Canada dismissed the appeal, finding that the shares were acquired to be held and used to generate business revenues, not for trading, and were therefore capital property.

The losses were correctly characterized as capital losses.