CRA accepts that royalty income from a music composing business is active business income

Gagliese Productions found that a company which earned royalties from the daily activities of its sole shareholder and employee in writing and producing music for TV episodes was earning income from an active business rather than from a specified investment business. CRA, in accepting this decision, noted that the company’s income from the music tracks aired in reruns of television episodes was incident to, and pertained to, its active business.

CRA does not consider this decision to be portable to a CCPC engaged in a mortgage-lending or real estate rental business.

Neal Armstrong. Summary of 7 June 2019 STEP CRA Roundtable, Q.7 under s. 125(7) – specified investment business.