John
B
Goetz:—This
is
an
appeal
by
the
appellant
with
respect
to
his
tax
assessment
for
the
1976
taxation
year
whereby
the
appellant
claimed
a
married
exemption
of
$890
on
the
basis
that
his
wife’s
net
income
for
that
year
was
$1,300.
The
appellant
filed
his
wife’s
1976
and
1977
tax
returns
as
well
as
an
affidavit
that
she
swore
in
1977
in
an
action
for
maintenance
and
support,
in
the
Trial
Division
of
the
Supreme
Court
of
Alberta.
The
respondent,
in
assessing
the
appellant,
stated
that
in
1976
the
appellant’s
wife
owned
the
municipal
property
described
as
10303-153rd
street,
Edmonton,
Alberta,
from
which
she
earned
rental
income.
On
October
1,
1976,
the
appellant’s
wife
converted
the
said
property
to
personal
use.
She
received
net
income,
including
rental
income
and
taxable
capital
gains,
in
excess
of
$2,190.
The
respondent
relied,
inter
alia,
upon
section
3,
subsections
13(1),
13(7),
sections
38,
39,
40,
subparagraph
45(1
)(a)(iii)
and
paragraph
109(1
)(a)
of
the
Income
Tax
Act,
SC
1970-71-72,
c
63,
aS
amended.
Although
the
appellant
lived
with
his
wife
during
most
of
1976,
he
did
not
provide
for
the
support
of
the
children
for
whom
he
claimed
the
deduction.
He
physically
separated
from
his
wife
for
a
period
of
two
weeks,
later
becoming
reconciled
and
finally
separating
in
February
1977.
The
wife
received
rent
of
$2,400
for
ten
months
during
1976
in
that
she
had
to
give
two
months’
notice
to
her
tenants.
The
house
was
vacant
in
November
1976.
Findings
The
appellant
disagrees
with
the
interpretation
of
Mrs
Victoria
Stephania
Semotiuk’s
tax
return
for
1976
and
says
that
taxable
capital
gain
should
have
been
included
in
her
1977
taxation
year.
I
agree
completely
with
the
allegations
in
paragraph
6
of
the
respondent’s
reply
to
notice
of
appeal
which
read
as
follows:
6.
The
respondent
submits
that
the
appellant’s
wife
converted
the
property
to
personal
use
on
October
1,
1976,
giving
rise
to
a
deemed
disposition
by
virtue
of
subsection
13(7)
and
subparagraph
45(1
)(a)(iii)
of
the
Income
Tax
Act,
and
resulting
recapture
and
taxable
capital
gains
in
excess
of
$2,190.
Accordingly,
the
appellant
is
not
eligible
to
claim
a
married
exemption
pursuant
to
the
provisions
of
paragraph
109(1)(a).
Decision
For
the
above
reasons,
I
dismiss
the
appeal.
Appeal
dismissed.
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