http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/107976/index.do 
Rasmussen v. The Queen (February 11, 2015 – 2015 TCC 34, Boyle J.).
Précis: The taxpayer engaged in horse racing for 20 years with an average loss of $20,000 each year. He was not entitled to ITC’s as it was not a commercial activity.
Decision: CRA denied Mr. Rasmussen ITC’s on his horse racing activities:
[1] In this Informal Procedure appeal, Mr. Rasmussen has appealed to the Court in respect of the denial by Canada Revenue Agency (“CRA”) of input tax credits (“ITCs”) in respect of his racehorse farming activities for the periods beginning October 1, 2007 and ending September 30, 2011. It is the Respondent’s position that Mr. Rasmussen did not qualify for ITCs because he was not engaged in commercial activities. Specifically, it is the Respondent’s position that Mr. Rasmussen’s activities did not have a reasonable expectation of profit or “REOP”. The taxpayer agrees that the issue to be determined is whether his activities were commercial activities. It is the taxpayer’s position that his activities constituted a business carried on by him with a REOP.
Facts
[2] Mr. Rasmussen testified as the only witness. He began his farming activities in 1991. On the evidence before the Court at the hearing, I find that from the outset, or at least from very early on, this was comprised of both standardbred horse breeding and standardbred horse racing activities. In most of the years preceding the years in issue, horse breeding was the primary farming activity and horse racing the secondary.
[3] The horse breeding activities involved the purchase of brood mares that Mr. Rasmussen felt were promising and attractive, their impregnation, and the sale of their yearlings at auction.
[4] The horse racing activities involved the buying of yearlings (or an interest in a yearling) that Mr. Rasmussen felt were promising and attractive at auction, having them trained, and having them race at racetracks for purses. It does not appear that any of the yearlings bred by him were trained and raced by him. Over the years, Mr. Rasmussen usually owned or had interests in between one and four race horses.
[5] Both parties agree that Mr. Rasmussen lost money each year between 1991 and 2010 at an average rate of about $20,000 annually. Mr. Rasmussen ended his breeding activities altogether in 2004 or 2005. About that time race track purses in Ontario had been significantly enhanced. He chose then to focus solely on horse racing. His losses from 2004 increased through 2010. Neither his losses, nor his increase in losses beginning in 2004, appear to result from horses being purchased and deducted on a cash basis as is allowed for farmers in computing income for tax purposes.
The Tax Court discounted his evidence that he had profitable quarters after 2010:
[8] Mr. Rasmussen put in some select evidence that supported his position that he had some profitable quarters in the years after 2010. This did not include any tax returns, financial statements or profit and loss statements. This evidence certainly did not rise to the level required to even prima facie challenge assumption 12(a) in the Respondent’s Reply that Mr. Rasmussen claimed a $9,007 loss in his 2011 income tax return. The testimony about post-2011 profitable quarters is of dubious value; there was little or no supporting GST/HST returns, income tax returns or similar written evidence for most if not all of them. There is no evidence his own numbers or backup documents were ever provided to or reviewed by CRA, nor of the current status of any filings.
In the end the Court dismissed the appeal as there was no commercial activity:
[13] On the evidence before the Court, the Appellant has not satisfied it on a balance of probabilities that his horse racing activities constituted a commercial activity in the periods in question through to 2011. Given the few or weak indicia of commerciality and a 20 plus year history of losses, it appears Mr. Rasmussen was, on a personal level, enjoying gambling on the sport of kings in his breeding and training activities instead of at a betting window.