Rocco Gagliese Productions – Tax Court of Canada finds that royalties generated by a CCPC from writing TV-episode music were active business income

A company which earned royalties from the daily activities of its sole shareholder and employee in writing and producing music for TV episodes was found to be earning income from an active business and not earning income from a specified investment business. D’Arcy J stated:

The principal purpose of the Appellant’s business was to earn income from Mr. Gagliese’s daily activities of originating and recording music tracks for individual television episodes. As Mr. Gagliese testified, if you take away his daily writing activities, the Appellant earned little or no income.

Neal Armstrong. Summaries of Rocco Gagliese Productions Inc. v. The Queen, 2018 TCC 136 under s. 125(7) – specified investment business, and s. 129(4) – income or loss - para. (b).