Sommerer - Federal Court of Appeal finds that an Austrian private foundation is not a trust - and that s. 75(2) does not apply to sales at fair market value

An Austrian private foundation was found in obiter dicta not to be a trust for Canadian income tax purposes given that it had juridical personality and owned its property rather than holding it for the taxpayer and other alleged beneficiaries.  (The reasons suggest that it was a corporation instead.)  Furthermore, s. 75(2) does not apply to sales of property for fair market value proceeds to a trust (or an alleged trust, in this case) - otherwise the same gain could be attributed under s. 75(2) to the vendor, and to the settlor who had contributed the property used to make that purchase.

Respecting the first question, Sharlow J.A. implicitly applied the general entity classification methodology of Memec and Backman, and of CRA (see ITTN No. 38).

Neal Armstrong.  Summary of Sommerer v. The Queen, 2012 FCA 207 under s. 104(1) and 75(2).