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Docket: 2003-2975(IT)I
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BETWEEN:
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BRUCE INGLIS,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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____________________________________________________________________
Appeal heard on January 6, 2004 at Vancouver,
British Columbia
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Before: The Honourable Justice L.M. Little
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Appearances:
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For the Appellant:
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The Appellant himself
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Counsel for the Respondent:
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Gavin Laird
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____________________________________________________________________
JUDGMENT
The
appeal from the assessment made under the Income Tax Act
for the 2000 taxation year is allowed, without costs, and the
assessment is referred back to the Minister of National Revenue
for reconsideration and reassessment to permit the Appellant a
further deduction in the amount of $65.53 in accordance with the
attached Reasons for Judgment.
Signed at Vancouver, British Columbia, this 9th day of January
2004.
Little, J.
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Citation: 2004TCC28
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Date: 20040109
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Docket: 2003-2975(IT)I
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BETWEEN:
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BRUCE INGLIS,
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Appellant,
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and
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HER MAJESTY THE QUEEN,
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Respondent.
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REASONS FOR JUDGMENT
Little, J.
A. FACTS:
[1] In 1993 the Appellant and two
associates purchased a property in Nanaimo, British Columbia (the
"Property"). The Property contained four rental
units.
[2] The price paid for the Property
was $251,500.00.
[3] The Purchasers obtained a mortgage
(the "Mortgage") in the amount of $188,625.00. The
balance of the purchase price was paid in cash by the Appellant
and his associates.
[4] The Appellant paid $9,300.00 in
cash to purchase a 12.5% interest in the Property.
[5] Over the years the units in the
Property were rented out to various tenants.
[6] In June 2000 the Property was sold
for $183,000.00. The Appellant's liability under the Mortgage
and the mortgage liability of his associates was assumed by the
Purchaser. The Appellant did not receive any cash on the sale of
the Property.
[7] When the Appellant filed his
income tax return for the 2000 taxation year he completed the
Terminal Loss Form provided by the Canada Customs and Revenue
Agency ("CCRA") and concluded that he was entitled to
claim a terminal loss in the amount of $16,012.00.
[8] Officials of the CCRA audited the
Appellant's 2000 income tax return and concluded that the
terminal loss suffered by the Appellant on the sale of the
Property was $10,864.88. The CCRA issued a Notice of Reassessment
and reduced the terminal loss suffered by the Appellant to
$10,864.88.
[9] The Appellant filed a Notice of
Objection to the Reassessment.
[10] An official of the Appeals Section of
the CCRA concluded that the terminal loss suffered by the
Appellant on the sale of the Property was $9,300.00.
B. ISSUE:
[11] Is the terminal loss of $9,300.00 as
determined by the officials of the CCRA properly calculated?
C. ANALYSIS:
[12] During the hearing the Appellant argued
that in determining the cost of the Property for the purposes of
calculating the terminal loss suffered by him, he should not be
required to include the Mortgage that was obtained when the
Property was purchased.
[13] I do not agree. In determining the
ordinary meaning of the words "cost or purchase price"
for the purpose of calculating the terminal loss suffered on the
sale of the Property it is necessary to include all cash paid
plus the Mortgage that was obtained.
[14] I have carefully reviewed the
calculations used by the CCRA in determining the terminal loss
that may be claimed by the Appellant and I have concluded that
the calculations of the Minister are correct, i.e. the terminal
loss suffered by the Appellant was $9,300.00.
[15] During the hearing, counsel for the
Respondent conceded that the Appellant was entitled to deduct a
further amount of $65.53. This amount represents 12.5% of the GST
of $524.30 that was paid to the lawyer when the Property was
sold.
[16] The terminal loss suffered by the
Appellant when the Property was sold should be calculated as
follows:
Terminal Loss
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As calculated by the CCRA
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$9,300.00
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As conceded by counsel for
the Respondent
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65.53
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Total Terminal Loss to be allowed
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$9.365.53
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[17] The appeal is to be allowed, without
costs, to permit the Appellant a further deduction in the amount
of $65.53.
Signed at Vancouver, British Columbia, this 9th day of January
2004.
Little, J.
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