http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/143278/index.do
Turner v. The Queen (April 1, 2016 – 2016 TCC 77, Masse D.J.).
Précis: Mr. Turner was a retired electrical engineer. In each of 2012 and 2013 he claimed roughly $45,000 of non-capital losses carried forward from preceding taxation years. His evidence was that the losses arose from a series of bad investment decisions made over a period stretching back as far as 1991 and going up to 2004. He had essentially no documentation to support his claim and the court did not accept his evidence that he was in the business of dealing in securities prior to 2005. Accordingly the appeal was dismissed. As this was an informal procedure appeal there was no order as to costs.
Decision: This case boiled down to a lack of credible evidence:
[23] The onus is on the Appellant to establish on the balance of probabilities that he was in the business of trading in securities. He has provided little to no evidence that he was conducting a business other than his self‑serving testimony that he believed he was. He did not bring any receipts, trading records, account records, ledgers, bank statements or any third party records capable of establishing that his activity had the requisite degree of commerciality. The Appellant failed to produce a single document to show that he either acquired or disposed of shares during the period of 2002 and following. There is no evidence that he still owned any shares of Central or that there was a disposition of those shares in that period by way of bankruptcy or otherwise. I come to the conclusion that the Appellant was not carrying on the business of a dealer in securities and therefore he had no business losses that could be carried forward.
[24] Even though I have concluded that the Appellant was not carrying on a business, I have no difficulty in concluding that he still suffered losses in the form of carrying charges on money borrowed to purchase shares. These carrying charges can be considered as part of the cost of acquiring and disposing of the shares. They form part of the adjusted cost base of the shares and, if the shares are disposed of at a loss, then the carrying charges form part of the capital loss on the disposition of the shares. These capital losses are then available to be carried forward and used to offset capital gains in future years. There is no evidence that the Appellant incurred any net capital losses from 2002 and following and so he has no net capital losses to carry forward. In any event, since the Appellant did not realize any capital gains in 2012 and 2013, these carrying charges, which could be considered to be part of net capital losses, could not be carried forward to those years.
Conclusion
[25] On considering all the above factors, I come to the conclusion that the Appellant has failed to show that his activities in relation to the trading in securities were conducted in a commercial manner. I conclude that the Appellant has failed to establish that he was conducting a business as a dealer in securities. In addition, the Appellant did not have any net capital losses available to carry forward to 2012 and 2013.
Accordingly the appeal was dismissed. As this was an informal procedure appeal there was no order as to costs.