Search - connection

Work expended on or in connection with the property realized. If effort is put into bringing the property into a more marketable condition during the ownership of the taxpayer or if special efforts are made to find or attract purchasers (such as the opening of an office or advertising) there is some evidence of dealing in the property. 5. ... Connection to taxpayer's business As is noted above and below, a taxpayer is more likely to be considered to have acquired real property as an adventure in the nature of trade (or as inventory) if it has experience and expertise in real estate development or trading activities (Friesen, O&M, Lee, Rivermede, Happy Valley). ... A taxpayer which is a speculator or trader in real estate, may be able to establish that the property in question was acquired by it in connection with a separate business (e.g., farming) so that the property was acquired as a non-trading asset to be use in that business (Mintenko). ...

These requirements are as follows: the taxpayer must be employed in the year in question in connection with the selling of property or the negotiating of contracts for the employer (preamble of s. 8(1)(f)); the taxpayer must be obligated under the contract of employment to pay his or her own expenses (s. 8(1)(f)(i)); the taxpayer must be ordinarily required to carry on the duties of employment away from the employer's place of business(s. 8(1)(f)(ii)); the taxpayer must be remunerated in whole or in part by commissions or other similar amounts fixed by reference to the volume of the sales made or the contracts negotiated (s. 8(1)(f)(iii)); the taxpayer must not be in receipt of an allowance for travel expenses in respect of the year in question which is not included in the taxpayer's income by virtue of s. 6(1)(b)(v); s. 6(1)(b)(v) excludes, from the allowances that are otherwise includible in employment income, reasonable allowances for travel expenses received by an employee from the employer in respect of a period when the employee was employed in connection with the selling of property or negotiating of contracts for the employer (s. 8(1)(f)(iv)); the amounts expended by the taxpayer must not be capital expenditures (except as described in s. 8(1)(j) respecting capital cost allowances for motor vehicles that are used or aircraft that are required for use in the performance of duties of the office or employment, or certain related interest financing costs) (s. 8(1)(f)(v)); the amounts expended are not described in s. 18(1)(l) (respecting expenses for the use or maintenance of a yacht, camp, lodge, or golf course or facility (subject to some exceptions) or membership fees or dues for most clubs) (s. 8(1)(f)(vi)); or the amounts expended qualified as deductions in computing the automobile standby inclusion under. 6(1)(e) (s. 8(1)(f)(vii)). ... The jurisprudential tests developed in connection with applying the general prohibition (in the absence of specific provisions to the contrary) in s. 18(1)(b) against the deduction of capital expenditures in the computation of income from a business or property also apply to the prohibition in s. 8(1)(f)(v) against the deduction of capital expenditures in the computation of income from an office or employment (see 6 above). ...

The Explanatory Notes express this as a requirement "that the parties have an expectation, at the time of the investment, that the closer business connection… will continue for the foreseeable future," and state that "this requirement acts as a check to ensure that the connection to Canada is not temporary or contrived." The Explanatory Notes provide the following example: Example 1 – foreign-controlled Canadian manufacturer If commercial aircraft are manufactured by the CRIC and its non-resident parent company, the closer business connection condition in paragraph 212.3(16)(a) would not likely be met if the CRIC were to purchase a non-resident corporation that is a competing commercial aircraft manufacturer. ... If, however, the CRIC were the only company in the multinational group that manufactures military aircraft, then the closer business connection condition in paragraph 212.3(16)(a) may well be satisfied were the CRIC to purchase a non-resident corporation that was a competing military aircraft manufacturer. ...

., the sugar purchases of a sugar refiner), gains or losses on commodities futures contracts in that commodity in which the corporation engages in connection with that commodity will be realized on income account (Atlantic Sugar). ...

As a result of the Budget Amendments, we reviewed a number of prospectus amendments for investment funds, as well as applications that were filed in connection with fundamental changes being made by investment funds to alter their investment structures. ...

., a royalty contract) that has been supplied to the Canadian resident, and provisions such as ITA s. 212(1)(d)(v) which effectively deem a royalty under a contract to have a relevant connection to Canada where the royalty is computed by reference to the use of someone else's property in Canada (e.g., sales or production in Canada). ...

Legal fees incurred by a corporation in defending a shareholder and director in a civil or criminal action generally will be deductible if losing such cases would have a significant adverse effect on its revenues (Friedland) whereas legal expenses incurred in defending an officer or director will not be so deductible if there is only a remote connection between the action and the corporation's business (Border Chemical). ...

One of the early Canadian cases is Utah, where two operations were found to be separate businesses because there was no inter-connection, interlacing or interdependence of the two operations. ...

The question as to whether a non-resident is carrying on business in Canada turns on the mixed question of fact and law as to whether the connection, significance and level of its its activities in Canada are sufficient under the tests developed in the Anglo-Canadian jurisprudence to constitute carrying on a business in Canada. ...

In order for the giving of a guarantee to form a part of a non-permitted undertaking of the mooted mutual fund trust, it would not be sufficient to find that its giving was not highly integrated with the trust’s “good” investing (or real estate) undertaking: the guarantee would also need to have a sufficient connection with the non-qualifying undertaking. ...