Cases
Hokhold v. Canada, 2018 FCA 163
Partly as a delayed consequence of CRA’s seizure of computers and dental equipment of a dental practice and the misplacing of records when his...
Newmont Canada Corporation v. Canada, 2012 DTC 5138 [at 7292], 2012 FCA 214
The taxpayer, a mining company made $8,250,000 in loans to an exploration company. The debt including accrued interest amounted to $8,590.684...
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|---|---|---|
| Tax Topics - General Concepts - Onus | testimony sufficient to "demolish" assumptions | 159 |
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(c) | allocation of all of debt settlement payment to principal rather than interest grounded a full bad debt claim for the "unpaid" interest | 103 |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Loss v. Loss | loan made as investment in mining business | 170 |
Estate of the late Donald Mills v. The Queen, 2010 DTC 1301 [at 4078], 2010 TCC 443, aff'd 2011 DTC 5124, 2011 FCA 219
The taxpayer exchanged shares for a promissory note. Under s. 84.1(1)(b), the receipt of the promissory note resulted in a deemed dividend. The...
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| Tax Topics - Income Tax Act - Section 84.1 - Subsection 84.1(1) | no bad debt deduction | 77 |
Global Communications Ltd. v. The Queen, 98 DTC 6649, [1999] 1 CTC 23 (FCTD)
The taxpayer was required by the arm's-length purchaser of a subsidiary ("Tee Vee U.S.") to release debts owing by Tee Vee U.S. to the taxpayer....
Harrowston Corp. v. The Queen, [1997] 1 CTC 101, 96 DTC 6544
The taxpayer's entitlement under s. 215(6) in respect of non-resident withholding tax that it had failed to deduct from interest payments made to...
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| Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business | 65 | |
| Tax Topics - Income Tax Act - Section 9 - Expense Reimbursement | recovery of non-deductible amount | 65 |
Flexi-Coil Ltd. v. The Queen, 96 DTC 6350, [1996] 3 CTC 57 (FCA)
Before affirming that the Tax Court Judge did not commit an identifiable error in concluding on the basis of a review of financial statements of...
Liampat Holdings Ltd. v. The Queen, 96 DTC 6044, [1996] 2 CTC 246
At 96 DTC 6020, the inclusion in the taxpayer’s income of deemed interest under s. 17(1) was confirmed. Here, the taxpayer was found to be...
Sutherland v. The Queen, 91 DTC 5318, [1991] 1 CTC 495 (FCTD)
The taxpayer was able to establish that he did not intend the amounts of unpaid management fees owing to him by a company in which he had an...
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| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) | 47 | |
| Tax Topics - Income Tax Act - Section 5 - Subsection 5(1) | 103 |
Saskatchewan Co-Operative Credit Society Ltd. v. The Queen, 84 DTC 6225, [1984] CTC 628 (FCTD), aff'd 85 DTC 5599 [1986] 1 CTC 53 (FCA)
It was stated, obiter, that if a "loss is in the nature of a bad debt which does not come within the particular requirements of paragraph...
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| Tax Topics - Income Tax Act - Section 10 - Subsection 10(1) | 64 | |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Loss v. Loss | 138 |
Harlequin Enterprises Ltd. v. The Queen, 77 DTC 5164, [1977] CTC 208 (FCA)
The taxpayer was unable to deduct a reserve for the return of paperbacks which it had previously sold to a distributor on the basis of s....
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(e) | 120 | |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(l) | 92 |
Associated Investors of Canada Ltd. v. MNR, 67 DTC 5096, [1967] CTC 138 (Ex. Ct.)
The taxpayer, which was in the business of selling investment certificates to the public, made advances to its commission salesmen that were paid...
Frontenac Shoe Ltée v. MNR, 63 DTC 1129, [1963] CTC 181 (Ex Ct)
The taxpayer paid certain bills of a company owned by the brother of its shareholder, and approximately four years later claimed these amounts as...
See Also
Hokhold v. The Queen, 2017 TCC 217, aff'd 2018 FCA 163
As a result of CRA’s seizure of half of his dental equipment and his business computers, the taxpayer’s administrative assistant (Mrs....
Delle Donne v. The Queen, 2015 TCC 150
The taxpayer made a loan, bearing interest at 25%, to a corporation ("SA") owned by his brother-in-law, which in turn lent the funds, at the same...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(11) - Investment Contract | "debt" exists irrespective of demand | 99 |
| Tax Topics - Income Tax Act - Section 171 - Subsection 171(1) | reserve could be claimed on appeal | 90 |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(l) | doubtful debt reserve claimed implicitly as at the year end in light of subsequently revealed information | 542 |
Francis & Associates v. The Queen, 2014 DTC 1146 [at 3468], 2014 TCC 137 (Informal Procedure)
A review of a law firm's accounts in 2005 revealed that accounts had been rendered in 2002, 2003 and 2004 which were uncollectible and which had...
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| Tax Topics - Income Tax Act - Section 152 - Subsection 152(4) - Paragraph 152(4)(a) - Subparagraph 152(4)(a)(i) | taxpayers held to standard of wise and prudent law partner | 126 |
Supercom Canada Limited v. The Queen, 2005 DTC 1438, 2005 TCC 589
The taxpayer, which sold substantial quantities of its products to a U.K. corporation with which it was not dealing at arm's length on favourable...
Williams Gold Refining Co. of Canada v. The Queen, 2000 DTC 1829 (TCC)
The value of services provided by employees of the taxpayer to assist a sister company represented revenues notwithstanding that the amounts...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Loss v. Loss | 70 | |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Gross Revenue | 43 |
Burkes v. The Queen, 2000 DTC 2576 (TCC)
The taxpayer withdrew as partner from a professional firm at the end of its 1992 fiscal year. In preferring (subject to an adjustment made by the...
Anjalie Enterprises Ltd. v. The Queen, 95 DTC 216 (TCC)
In its return for its 1982 taxation year, the taxpayer had taken a deduction under s. 20(1)(p) for a debt owing to it and in 1988 its accountants...
E.C.E. Group Ltd. v. MNR, 92 DTC 2019, [1992] 2 CTC 2376 (TCC)
Before going on to find that a loss realized by a shareholder of a corporation on a disposition part-way through the year to another shareholder...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Loss v. Loss | 130 |
Roy v. MNR, 58 DTC 676 (TAB)
The consideration received by the taxpayer on the sale of a theatre, which gave rise to recapture of depreciation to it, included the assignment...
Hogan v. MNR, 56 DTC 183, 15 Tax ABC 1
Mr. Fisher accepted the determination made by the taxpayer of a bad debt allowance in connection with the transfer of his retail fur business to a...
Administrative Policy
27 March 2018 Internal T.I. 2017-0691941I7 F - Investissement frauduleux – Fraudulent Investment
Individuals had “invested” in what turned out to be a Ponzi scheme under which for many years they paid income taxes on interest reported as...
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| Tax Topics - Income Tax Act - Section 152 - Subsection 152(4.2) | s. 152(4.2) reversal of Ponzi interest inclusion must be applied for by 10th anniversary of the taxation year | 252 |
| Tax Topics - General Concepts - Effective Date | court order ab initio declaring loan void would eliminate interest income | 196 |
S3-F9-C1 - Lottery Winnings, Miscellaneous Receipts, and Income (and Losses) from Crime
1.43 A taxpayer may claim a deduction for a bad debt pursuant to paragraph 20(1)(p) in the year the fraud is discovered to the extent that...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose | repayment of embezzlement/losses from theft | 524 |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Timing | timing of deduction for loss from theft or embezzlement | 132 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Business | 314 | |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition | 170 | |
| Tax Topics - Income Tax Act - Section 3 | non-enumerated sources included/hobby receipts, windfalls and true gifts excluded | 1077 |
| Tax Topics - Income Tax Act - Section 40 - Subsection 40(2) - Paragraph 40(2)(f) | 306 | |
| Tax Topics - Income Tax Act - Section 5 - Subsection 5(1) | 220 | |
| Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) | voluntary payments | 88 |
| Tax Topics - Income Tax Act - Section 6 - Subsection 6(3) - Paragraph 6(3)(c) | 142 |
11 October 2013 APFF Roundtable, 2013-0495671C6 F - Déduction d'une partie d'une créance irrécouvrable
When asked how CRA's position - that a debt must be uncollectible in its entirety before it could qualify as a bad debt under s. 50(1) - could be...
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| Tax Topics - Income Tax Act - Section 50 - Subsection 50(1) | comparison of 20(1)(p)(i) and 50(1): latter requires full uncollectibility | 174 |
7 December 2009 External T.I. 2009-0349861E5 F - Déduction pour mauvaise créance
Interest was included in the taxpayer’s returns for 2004, 2005, and 2006 taxation years that was not due until November 2009, but which amount...
27 November 2003 Internal T.I. 2002-0180587 F - Mauvaise créance et taxes de vente
The accounts receivable of a taxpayer include GST and QST that is collectible by it on those sales. Does the write-off of the balance generate a...
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| Tax Topics - Excise Tax Act - Section 224 | remittance of tax by supplier results in subrogation of the Crown’s claim for the tax | 215 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(16) | bad debt credit is not an ITC | 99 |
14 December 1993 Memorandum 931814 (C.T.O. "Bad Debt Reduction for Part of a Loan")
Review of jurisprudence respecting whether a deduction may be taken under s. 20(1)(p) in respect of a partial debt write-down.
17 August 1992, T.I. 921353 (April 1993 Access Letter, p. 135, ¶C20-1141)
In order for the forgiveness of accrued interest owing by a non-arm's length person to be effective, there must be an amendment to the original...
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| Tax Topics - General Concepts - Effective Date | 41 | |
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(3) | 55 |
ATR-6 (22 Jan. 86)
on a restructuring of a corporation in financial difficulty ("Y Ltd.") which owes to X Ltd. a trade receivable which was included in X Ltd.'s...
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| Tax Topics - Income Tax Act - Section 76 | 66 |
IT-442R "Bad Debts and Reserves for Doubtful Debts"
5. ...[A] bad debt may be claimed in a taxation year only if the debt became bad in that year regardless of how long the debt may have been...
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| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(l) | 0 | |
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Account Receivable | 161 |
Articles
Tetreault, "Canadian Tax Aspects of Asset Securitization", 1992 Conference Report, p. 23:16.
Novek, "Deductibility of Financing Expenses", 1992 Corporate Management Tax Conference, c.3.
Frankovic, "Taxing Times: Foreclosures, Default Sales, Debt Forgiveness, Doubtful and Bad Debts", 1991 Canadian Tax Journal, p. 889.
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| Tax Topics - Income Tax Act - Section 80 - Subsection 80(1) | 0 | |
| Tax Topics - Income Tax Act - Section 80 - Subsection 80(5) | 0 |