Dubienski,
T.C.C.J.
(orally):—You
have
to
understand,
doctor,
that
the
law
does
not
refer
to
condominiums
or
any
other
business;
it
refers
to
any
business
that
does
not
show
a
reasonable
expectation
of
profit,
the
losses
in
that
business
cannot
be
set
off
against
your
other
earnings.
The
losses
remain
as
far
as
that
business
is
concerned.
Those
losses
can
be
carried
forward,
those
losses
can
be
applied
as
that
business
goes
on,
but
it's
completely
separate.
The
effect
of
the
Act,
however,
is
to
allow
some
relief
to
people
who
do
make
an
investment
in
a
business,
provided
that
those
losses
result
from
a
reasonable
expectation
of
profit.
In
other
words,
is
this
business
viable
and
is
it
potentially
viable?
And
that’s
why,
as
I
presume,
you
were
allowed
the
losses
for
1981,
1982
and
1983,
because
the
Department
said,
“Well,
we'll
give
this
man,
this
taxpayer,
time
to
establish
whether
or
not
his
business
is
profitable”.
And
then
they
wait
another
three
years
to
see
if
there's
been
any
turn-around,
if
there's
any
likelihood
that
it's
going
to
turn
around,
because
you
have
to
remember
that
we're
dealing
with
this
not
today
but
back
then.
So,
in
1984,
1985
and
1986,
they
saw
that
your
losses
were
increasing.
So,
at
that
time,
the
Department
says,
"This
doesn't
fall
within
the
law".
And
the
interpretation
of
the
law
is
based
on
the
cases,
as
you've
heard.
We
have
had
innumerable
cases
with
regard
to
condominiums
in
Florida
and
it
seems
to
be
a
pattern
that
either
the
taxpayer
was
lulled
into
a
feeling
that
it
was
going
to
be
a
good
thing
or
somebody
said,
"Don't
worry,
if
you
have
any
losses
you
can
set
it
off
against
your
income
tax",
which
is
bad
advice.
You
can't
set
off
any
losses
in
any
business
against
your
income
tax
unless
it's
a
viable
business.
I'm
bound
by
the
evidence
that's
come
before
me
today
that
while
it
might
be
in
1992
and
1993
you
might
end
up
having
to
pay
income
tax
on
the
profit,
and
then
it
shows
that
it's
profitable,
but
Parliament,
in
its
wisdom,
has
drawn
the
Act
in
such
a
way
that
has
to
be
interpreted
that
they
will
only
give
you
that
relief
of
losses
if
they
pertain
to
a
business
that
is
viable.
Now,
when
you
make
reference
to
the
Reichmans,
those
losses,
they
didn't
get
them
on
their
personal
income;
that
goes
against
the
company
and
they
can
carry
them
with
the
company,
but
they
don't
get
any
benefit
out
of
that
personally.
And
when
you
make
reference
to
other
condominiums
in
Toronto,
that
would
only
be
if
it
was
being
run
by
somebody
as
a
business,
and
I
venture
to
say
that
there
have
been
people
who
have
bought
condominiums
in
Canada
who
have
been
stung
because
they
ran
into
problems,
too.
I
have
to
say
that
I
appreciate
the
fact
that
you
have
presented
your
case,
certainly
as
well
as
any
counsel
could
have
done
for
you,
but
the
evidence
is
clear
that
I
cannot
hold
that
this
enterprise
that
you
embarked
on
in
1979
was
viable
and
at
the
time
of
assessment
showed
any
expectation
of
being
viable.
Accordingly,
I
will
have
to
disallow
your
appeal.
Appeal
disallowed.
Email this Content