Krumm – Tax Court of Canada applies the tax shelter rules on a private purchase of property described as Class 12 available-for-use property

The taxpayer acquired a 50% interest in software after being provided with a valuation report that indicated that the software was Class 12 property and qualified as being available for use. Visser J found that this was sufficiently tantamount to representing that the cost of the software could be written off over two years and found that there thus was an unregistered tax shelter, resulting in the CCA claims being denied under s. 237.1(6). He also rejected a submission that “the tax shelter rules are intended to apply only to publicly marketed tax shelters and not to private transactions between two parties.”

Neal Armstrong. Summary of Krumm v. The Queen, 2020 TCC 7 under s. 237.1(1) – tax shelter – (b).