Personal Tax, Estate & Wealth Planning

Taylor v. R. - TCC: Penalties sustained where claims made for fictitious business losses

Jan 13, 2016 By Bill Innes

Précis: The only issue in this case was the propriety of levying gross negligence penalties where the taxpayer claimed fictitious business losses. As in many prior cases the court sustained the penalties.
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Luschtinetz v. R. - TCC: No tax credits for children living with ex-spouse

Jan 12, 2016 By Bill Innes

Précis: The appellant was required pursuant to a court order to pay support for both his former wife and their children, who resided with the ex-wife. He claimed tax credits in respect of the children which CRA denied. His appeal to the Tax Court was dismissed.
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Blue v. R. - TCC: Annual payments were deductible as spousal support

Jan 11, 2016 By Bill Innes

Précis: Mr. Blue and his ex-wife agreed to her receiving $12,000 per annum for 5 years on the breakup of their marriage. Originally the payments were to be monthly but that was changed to one annual payment of $12,000. When he sought to deduct the first payment in 2013 CRA denied the deduction on the basis that it was not a payment for maintenance but rather a non-deductible capital payment.
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Durocher v. R. - TCC: Option not a nullity - corporation not a CCPC - no capital gains exemption

Jan 11, 2016 By Bill Innes

Précis: The appellants disposed of the shares of Gestion RJCG Inc. ("RJCG") in 2006 and claimed a capital gains exemption in respect of the disposition. CRA denied the exemption on the basis that RJCG was not a "qualified small business corporation shares" as defined by subsection 110.6(1) of the Income Tax Act (the “Act”). CRA concluded that RJCG was controlled by Aviva Canada Inc. ("Aviva"), a public corporation, by virtue of an option agreement throughout the 24 month period preceding the disposition. Thus it was not a Canadian-controlled private corporation (“CCPC) and, as a result, not a qualified small business corporation.
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Khattar v. R. - TCC: Taxpayer subject to penalties for claiming fictitious business losses

Jan 06, 2016 By Bill Innes

Précis: Mr. Khattar claimed fictitious business losses in 2008 ( as well as loss carry backs to the three preceding taxation years) on the advice of his tax preparer, Mr. Rasool. CRA denied the losses and imposed gross negligence penalties. The only point at issue in this appeal were the penalties.
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Iqbal v. R. - TCC: Taxpayer denied deduction for alleged cash and in-kind donations

Jan 06, 2016 By Bill Innes

Précis: The taxpayer claimed donations totalling $7,500 (both cash and in-kind gifts) to charities in 2008. The Tax Court held that she had not adduced evidence sufficient to support the making of the donations and dismissed the appeal. There was no order as to costs as it was an informal procedure appeal.
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Dicosmo v. R. - TCC: Mixed bag of deductions denied to sales person

Jan 05, 2016 By Bill Innes

Précis: Mr. Dicosmo was a highly paid sales person. He claimed a variety of deductions in 2003, 2004 and 2005. He claimed roughly $100,000 in unreimbursed employment expenses (including roughly $40,000 in salaries paid to his wife and two children) over the three year period; CRA allowed roughly $9,000 of the claim. He claimed allowable business investment losses of $63,999, $22,000, and $39,500 for the 2003, 2004, and 2005 taxation years, respectively; CRA rejected the claim.
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Kondur v. R. - TCC: Proposed amended Notices of Appeal not allowed

Dec 21, 2015 By Bill Innes

Précis: This decision involved a number of appellants and a dispute concerning CEE and CDE. Each appellant sought to file a Further Re-Amended Notice of Appeal which the Crown opposed on the basis that they did not conform with the Tax Court of Canada Rules (General Procedure). The Tax Court agreed with the Crown but permitted the appellants to file new Notices of Appeal which complied with the Rules and met conditions established by the Court. The Crown was awarded one set of costs for all of the appeals.
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Skrien v. R. - TCC: No moving expenses for meals consumed at home

Dec 18, 2015 By Bill Innes

Précis: Mrs. Skrien relocated from Saskatoon to Guelph for a new position. She claimed meal expenses of $1,530 for herself and her husband for a period of 15 days as relating to the move. CRA denied the meal expenses because she did not claim any lodging expenses so it assumed she claimed meal expenses when she and her husband were in fact living in their home (old or new). She did not testify but her agent argued that she was entitled to make such claims under CRA’s “simplified method” of accounting for moving expenses. The Tax Court held that “moving expenses” had to result from a move, not just meals consumed in the prior or new home before and after the actual move.
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Leith v. R. - TCC: Taxpayer was not engaged in farming as a business

Dec 17, 2015 By Bill Innes

Précis: The taxpayer was an investment advisor employed by BMO Nesbett Burns. In 2006 and 2007 he claimed deductions from his employment income which CRA disallowed. He also claimed farming losses which CRA disallowed on the basis that the farming was a personal and not a business activity. The Tax Court disallowed the expenses claims as it rejected the taxpayer’s evidence based largely on his production of altered or back-dated documents. On the issue of the farm losses the Court found that he did not carry on a farm business.
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