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16 May 2022- 11:17pm Jefferson – Federal Court of Appeal indicates that a taxpayer had not “demolished” the Minister’s assumption where it is demonstrated to be somewhat incorrect Email this Content The taxpayer relied on a statement in Hickman that the “initial onus of ‘demolishing’ the Minister’s exact assumptions is met where the appellant makes out at least a prima facie case.” ... In rejecting this position, Monaghan JA stated that the taxpayer “places far too much emphasis on the word ‘exact’ and gives insufficient weight to the word ‘demolish’ in … Hickman. ” and further stated that “establishing some consideration for the cheques is not sufficient to demolish the Minister’s assumption,” noting in this regard that the “purpose of pleading the assumption is to provide the appellant with notice of the case the appellant has to meet” and here, the taxpayer knew that, in the context of a s. 160 assessment, he needed to establish that he had provided fair market consideration for the cheques, “not merely some consideration.” ... Canada, 2022 FCA 81 under General Concepts – Onus. ...

10 July 2023- 11:43pm CRA indicates that an s. 104(21) designation can be made re distributing the taxable half of a trust capital gain to a corporate beneficiary – who receives no CDA addition Email this Content An inter vivos Canadian resident trust pays an amount equal to its net taxable capital gains for the year to a Canadian private corporation that is a beneficiary and designates that amount pursuant to s. 104(21). ... (a)(i.1) of the capital dividend account definition, there would be no addition to the corporation’s CDA – whereas there would be such an addition if both portions of the capital gains were distributed to the corporate beneficiary. ... Summary of 20 June 2023 STEP Roundtable, Q.12 under s. 89(1) – CDA – (a.1). ...

1 February 2019- 2:33am Kaul – Tax Court of Canada finds that art work was donated at a FMV equal to its cost rather than appraised value Email this Content The taxpayers bought sets of artists’ prints (each set consisting of 11 prints) at a purchase price that might be 7 or 10 times the vendor’s cost, and then immediately donated 10 out of the 11 prints in each set to registered charities at appraised values (reflected in the charitable receipts issued) around 3 times their purchase price. ... The Queen, 2019 TCC 17 under General Concepts – FMV – Other. ...

28 March 2025- 12:33am Seabridge – BC Supreme Court finds that pre-feasibility expenses to assess whether a deposit could potentially support a mine qualified as exploration expenses Email this Content Seabridge incurred various pre-feasibility expenses in relation to a large and complex gold-bearing deposit in BC. ... Summary of Seabridge Gold Inc. v British Columbia, 2025 BCSC 558 under s. 66.1(6) – CEE – (f). ...

11 September 2022- 11:02pm 4432002 Canada – Tax Court of Canada finds that a sale agreement did not have a reverse earn-out so that s. 12(1)(g) applied Email this Content The taxpayer and another company sold their rights to software for lump-sum payments plus additional payments (labeled in the sale agreement as “Earn-Out Payments”) calculated as a declining percentage of the software sales made by the purchaser (“MITT”) over the following three years, except that the total payments (to both vendors) were capped at US$8 million. ... In rejecting the taxpayer’s principal argument that the purchase price cap established that such payments were received pursuant to a “reverse earnout” arrangement, St-Hilaire J stated: This is not … a situation where the sale agreement provided that MITT will pay the maximum amount, a portion of which may have to be repaid if certain financial targets are not met. … Rather, what one finds … are clauses providing for the payment of lump sums and the payment of additional amounts based on sales of the Software. … [T]he sales agreements … are clearly "earnout" agreements. … [T]here is nothing in the wording of paragraph 14(1)(b) to suggest that it should be accorded precedence over paragraph 12(1)(g). ...

30 August 2020- 11:45pm Rogers Enterprises – Tax Court of Canada finds no GAAR tax benefit where an alleged excessive CDA addition was not yet distributed to individual shareholders (and also no abuse) Email this Content To simplify somewhat, a group of private corporations owned for the benefit of the Rogers family structured their affairs such that one corporation (“CGESR”) was the beneficiary of policies on the life of Ted Rogers whereas a company (“ESRL”) holding shares of CGESR through another CCPC (“ESRIL 98”) was the policyholder and had been paying the premiums, so that its adjusted cost basis (“ACB”) was $42M. ... The Queen, 2020 TCC 92 under s. 245(1) – tax benefit, s. 245(4), and s. 89(1) – CDA – (d)(iii). ...