|
Docket: 2006-3654(IT)I
|
|
BETWEEN:
|
|
DANIEL M. CHAMCZUK,
|
|
Appellant,
|
|
and
|
|
|
|
HER MAJESTY THE QUEEN,
|
|
Respondent.
|
____________________________________________________________________
Appeal heard on July 30, 2007 at Edmonton, Alberta
|
Before: The
Honourable Justice L.M. Little
|
|
|
|
Appearances:
|
|
|
|
|
For the
Appellant:
|
The Appellant himself
|
|
|
|
|
Counsel for the
Respondent:
|
Carrie Mymko
|
____________________________________________________________________
JUDGMENT
The appeal from the assessment made under the
Income Tax Act for the 2004 taxation year is dismissed, without
costs, in accordance with the attached Reasons for Judgment.
Signed at Vancouver, British
Columbia, this 21st day of August
2007.
Little
J.
|
Citation: 2007TCC446
|
|
Date: 20070821
|
|
Docket: 2006-3654(IT)I
|
|
BETWEEN:
|
|
DANIEL M. CHAMCZUK,
|
|
Appellant,
|
|
and
|
|
|
|
HER MAJESTY THE QUEEN,
|
|
Respondent.
|
REASONS FOR JUDGMENT
Little J.
A. FACTS
[1] The
Appellant resides in Ardrossan, in the Province of Alberta.
[2] The Appellant established a self-directed Registered Retirement Savings
Plan (“RRSP”) with the Canadian Imperial Bank of Commerce (“CIBC”).
[3] In 2004 the Appellant instructed officials of CIBC to have the RRSP
purchase shares in Spantel Communications Inc. (“Spantel”) at a cost of
$16,445.07.
[4] It was subsequently determined that the shares of Spantel were a non‑qualified
investment for the Appellant’s RRSP.
[5] In 2004 CIBC sold the shares of Spantel that were owned by the Appellant’s
RRSP at a price of $10,080.00.
[6] CIBC issued a T4RSP form to the Appellant showing other income totalling
$16,445.07 for the 2004 taxation year.
[7] CIBC
issued a T4RSP form to the Appellant showing a deduction of $10,080.00 for the
2004 taxation year.
[8] When the Appellant filed his income tax return for the 2004 taxation year
he reported a contribution of $3,100.00 to his RRSP.
[9] By Notice of Reassessment dated March 16, 2006, the Minister of National
Revenue (the “Minister”) reassessed the Appellant to include income of
$16,445.07 and allowed a deduction of $10,080.00 based on the T4RSP form issued
by the CIBC.
B. ISSUE
[10] The issue to be decided is whether the Appellant has been properly
reassessed by the Minister with respect to his self-directed RRSP.
C ANALYSIS AND DECISION
[11] Subsection 146(10) of the Income Tax Act (the “Act”) reads
as follows:
Where at any time in a taxation
year a trust governed by a registered retirement savings plan
…
(b) uses or permits to be used any
property of the trust as security for a loan,
[12] Subsection 146(6) of the Act reads as follows:
Where in a taxation year a trust
governed by a registered retirement savings plan disposes of a property that,
when acquired, was a non-qualified investment, there may be deducted, in computing
the income for the taxation year of the taxpayer who is the annuitant under the
plan, an amount equal to the lesser of
(a) the amount that,
by virtue of subsection (10), was included in computing the income of that
taxpayer in respect of the acquisition of that property, and
(b) the proceeds of
disposition of the property.
[13] It will be noted that subsection 146(10) clearly provides that the fair
market value of the non-qualified investment acquired by the Appellant’s RRSP
shall be included in the Appellant’s income.
[14] In this situation the Appellant has been
allowed a deduction pursuant to subsection 146(6) of the Act of the
lesser of the amount that was included in his income under subsection 146(10)
of the Act and the proceeds of the disposition of the Spantel shares
which was $10,080.00. I believe that the Minister was correct when he issued
the Reassessment.
[15] The appeal is dismissed without costs.
Signed at Vancouver, British Columbia,
this 21st day of August 2007.
Little
J.
Email this Content