Weaver – Quebec Court of Appeal applies the REOP doctrine to a “gentleman farmer”

A full-time engineer also maintained two horses, which his two daughters rode in equestrian competitions. He had visions of his elder daughter competing in the junior Olympics and making a career of her riding. Revenues from the operation averaged less than 10% of claimed expenses. In reversing the finding below that this “gentleman farmer” was entitled to his claimed losses, the Court stated:

[T]he judge did not analyze the activities of the respondent in relation to the objective factors laid out … in Stewart, namely, (1) the profit and loss experience in past years; (2) the taxpayer’s training; (3) the taxpayer’s intended course of action; and (4) the capability of the venture to show a profit.

… [I]t is difficult to conclude that the predominant intention of the respondent was to derive profit from the equestrian activities of his daughters and that he showed serious businesslike conduct.

Neal Armstrong. Summary of Agence du revenu du Québec v. Weaver, 2019 QCCA 1687 under s. 3(a) – business source.