Docket: 2011-2975(IT)I
BETWEEN:
HELLMUT SCHMIDT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
____________________________________________________________________
Appeal
heard on April 19, 2012, at Calgary, Alberta
Before: The Honourable
Justice Valerie Miller
Appearances:
|
For the Appellant:
|
The
Appellant himself
|
|
Counsel for the Respondent:
|
Robert A. Neilson
|
____________________________________________________________________
JUDGMENT
The appeal from the
reassessment made under the Income Tax Act for the 2009 year is allowed
and the matter is referred back to the Minister for reconsideration and
reassessment on the basis that:
a) The Appellant’s investment income
is reduced by $2,765.81; and,
b) The capital gain reported by the
Appellant is reduced by $469.84.
In all other respects the
appeal is dismissed without costs.
Signed at Ottawa, Canada,
this 30th day of April
2012.
“V.A. Miller”
Citation: 2012TCC140
Date: 20120430
Docket: 2011-2975(IT)I
BETWEEN:
HELLMUT SCHMIDT,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
V.A. Miller J.
[1]
Hellmut Schmidt appeals
the reassessment of his 2009 taxation year. The issue concerns the tax
treatment of certain investment income received by the Appellant from RBC
Dominion Securities Inc. (“RBC Dominion”).
[2]
It is the Appellant’s
position that the investment income consists of income, taxable capital gains
and a return of capital.
[3]
It is the Respondent’s
position that the entire investment income received by the Appellant from RBC
Dominion is income.
[4]
The Appellant and his
spouse were joint owners in various sources of investment income. Sixty-four
percent of the joint income was reported by the Appellant and 36% was reported
by his spouse.
[5]
When he filed his
income tax return for 2009, the Appellant included a T5 from RBC Dominion which
indicated that he and his spouse had received foreign income of US$17,984 and
foreign tax of US$2,697 was paid. The foreign income converted to $20,537.73 in
Canadian dollars and hereafter, all amounts that I refer to will be in Canadian
dollars.
[6]
According to the
Summary of Investment Income and Expenses for 2009 issued to the Appellant by
RBC Dominion, the Appellant held 23,000 units of DNP Select Income Fund Inc. (“DNP”)
and 100 common shares of Visa Inc. This summary indicated that the investment
income paid to the Appellant consisted of dividends from DNP of $20,487.48 and
from Visa of $50.25.
[7]
The Appellant searched
the internet and found that DNP had not only distributed investment income in
2009 but had also distributed Long-Term Capital Gains in January 2009 and a
Return of Capital in February to December 2009. Prior to filing his income tax
return, the Appellant wrote to RBC Dominion to request a corrected T5 or a Form
1099-Div which included the capital gains and return of capital. He did not
receive a response.
[8]
Using the distributions
per share which were reported by DNP on the internet, the Appellant and his
spouse reported only $12,854.93 of the investment income with the Appellant
reporting $8,226.94 (64%) of the income and his spouse reporting $4,627.99
(36%).
[9]
The Appellant
calculated that $6,948.67 of the investment income was a return of capital and
neither he nor his spouse reported it. He also calculated that $734.13 of the
investment income was a capital gain and this amount was reported by him and
his spouse in the ratio 64/36.
[10]
I cannot agree with the
Appellant’s position. He has not presented any evidence that would allow me to
conclude that the type of distributions made by DNP flowed through to him. None
of the amounts received by the Appellant resulted from the sale of any of his
units in DNP.
[11]
On reassessment, the
Minister included the entire amount of $7682.80 ($6,948.67 + $734.13) in the
Appellant’s income. In the Reply to Notice of Appeal, the Minister conceded
that the investment income was owned jointly by the Appellant and his spouse in
the ratio 64/36 and that he failed to delete the capital gain which the
Appellant had reported. Therefore the appeal is allowed and the matter is
referred back to the Minister for reconsideration and reassessment on the basis
that:
a) The Appellant’s investment income is reduced
by $2,765.81; and,
b) The capital gain reported by the
Appellant is reduced by $469.84
[12]
In all other respects
the appeal is dismissed without costs.
Signed at Ottawa, Canada, this 30th day of April 2012.
“V.A. Miller”
CITATION: 2012TCC140
COURT FILE NO.: 2011-2975(IT)I
STYLE OF CAUSE: HELLMUT SCHMIDT AND
HER
MAJESTY THE QUEEN
PLACE OF HEARING: Calgary,
Alberta
DATE OF HEARING: April 19, 2012
REASONS FOR JUDGMENT BY: The
Honourable Justice Valerie Miller
DATE OF JUDGMENT: April 30, 2012
APPEARANCES:
|
For the
Appellant:
|
The Appellant himself
|
|
Counsel for the
Respondent:
|
Robert A. Neilson
|
COUNSEL OF RECORD:
For the Appellant:
Name:
Firm:
For the
Respondent: Myles J. Kirvan
Deputy
Attorney General of Canada
Ottawa,
Canada
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