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In its memorandum, Atlantic Packaging refers to the six factors that have been considered by the courts in determining whether the gain realized on a disposition of a particular property is an income gain or a capital gain. ... While it would be presumed that Atlantic Packaging would not be frequently selling off an entire division, there is no indication of whether Atlantic Packaging followed a similar pattern or similar transactions in disposing of other depreciable property. … [T]he absence of this evidence is sufficient for this Court to reject Atlantic Packaging’s argument that this new issue should be considered by this Court. ...

Although 501 treated the acquired IP as depreciable property, it considered that Taxation Act s. 99 (equivalent to ITA s. 13(7)(e)) did not apply to reduce the capital cost to it of the acquired IP because, in SherWeb’s hands, the IP had been eligible capital property rather than depreciable property. ... Although he considered this to be a largely sufficient ground, he went on to refer to the definition of eligible capital property (which, similarly to the federal definition, relevantly required in effect that the amount to which the taxpayer is entitled for the property’s disposition is “not included in computing the taxpayer's income or any gain or loss of the taxpayer from the disposition of a capital property” (para. 104)- and found that this condition had been met as SherWeb had not reported any disposition of a capital property, and had instead correctly treated the costs of developing its software (its employees’ salaries) as “a recurring and current expense in and of themselves" (para. 115). ...

The Queen, 2022 TCC 5-- summary under Subsection 147(3.1) Summary Under Tax Topics- Other Legislation/Constitution- Federal- Tax Court of Canada Rules (General Procedure)- Section 147- Subsection 147(3.1) a settlement offer not made on a principled basis should be ignored for cost award purposes The appellant, DTI claimed entitlement to substantial indemnity costs per Rule 147(3.1) on the basis that in its appeal, it had achieved greater success than that reflected in an offer to settle made by it, which would have reduced the assessed HST for the reporting periods at issue to $15,000, which was explained to represent approximately 50% of the Canadian portion of the total amount of HST at issue of $118,300 (relating also to supplies considered by DTI to have been made in the US). ... However, although the $4,000 amount of costs initially awarded was based on the Court’s Tariff B for party and party costs, he considered this to be on the “lean side,” and increased the award to $8,110, not only to reflect some missing items, but also because (para. 18): My judicial discretion as to costs does not require that I award costs on a tariff basis. ...

In finding that there were no reasonable grounds for interfering with this decision, Woods JA indicated inter alia: that in order for the Minister’s decision to be reasonable “the outcome should be considered in light of the underlying rationale to ensure that the decision as a whole is transparent, intelligible and justified” and that the decision satisfied those requirements (para. 12). “The fact that the Minister did not discuss the harshness of the tax result does not mean that it was not considered and does not render the decision unreasonable.” ...

Wong J noted (at para. 17) that following 1994 amendments to s. 6(1)(b)(vii) and (vii.1) “an allowance for travel or motor vehicle expenses must be wholly reasonable in order to be excluded from employment income”, and conversely “where such an allowance is considered unreasonable and must therefore be included in income, travel or motor vehicle expenses may be deductible from income by virtue of paragraphs 8(1)(h) and (h.1)” (para. 18). ... If the allowance was instead considered under s. 6(1)(b)(vii.1), the allowance would be deemed unreasonable by virtue of s. 6(1)(b)(x), as Burnaby City Hall was “an arbitrary starting point” so that “the allowance was not based solely on the number of kilometres driven for an employment purpose” (para. 21). ...

According to the evidence, the period that can be considered as a building construction period within the meaning of TA section 135.4 LI is a four-month period, from April 12, 2013 to July 17, 2013.... [E]xpenses incurred before and after this period must be considered current and non-capitalizable. ...

The King, 2023 TCC 156-- summary under Business Source/Reasonable Expectation of Profit Summary Under Tax Topics- Income Tax Act- Section 3- Paragraph 3(a)- Business Source/Reasonable Expectation of Profit no evidence to call into question the underlying assumption in Stewart that the taxpayer pursued her clearly-commercial farming venture for profit Before going on to find that the taxpayer’s losses from a cattle operation (which were substantial both in dollar terms and relative to the revenues) were deductible as business losses before consideration of the limitation on farming-loss deductions under s. 31, Owen J stated (at paras. 103-105): The assumption underlying the test in Stewart is that a commercial activity is undertaken for profit… Consequently, unless there is some reason to question this assumption in the circumstances of a particular case, an activity that is on its face clearly a commercial activity as opposed to a personal undertaking is considered a source of income. ... Noël, C.J. simply found that the transactions in Paletta had the “appearance” of being commercial but in fact were not “clearly commercial” when one considered all the circumstances. ...

Expense- Financing Expenditures loan received on capital account if it is an addition to borrower's capital (cf. inventory) In finding that interest paid by the taxpayer (an employed broker of an investment dealer) on a loan taken out by him in order to purchase the customer list of a departing employee was a payment "on account of capital", Major J. first responded (at para. 37) to the submission of the Minister that the Act was a complete code for the deductibility of interest so that interest payments could only be deducted if they met the requirements of specific provisions such as s. 8(1) (j) or s. 20(1) (c) by stating that “[i]t is evident from the manner in which [CRA] allows moneylenders to deduct interest payments, without reliance on any specific section of the Act, when they are calculating profits for the purposes of determining their income for the year under s. 9 that they have not adhered to this position in the past”, and noted that in other jurisdictions the question considered was whether interest payments were of a capital nature whereas in Canada, deduction was prohibited if a payment was "on account of capital". ... If the money adds to the financial capital then the payment of interest on that loan will be considered to be a payment “on account of capital”. ...

In particular, although the unitholders of the fund became shareholders of the taxpayer, this was considered not to entail an acquisition of control of the taxpayer by a group of persons. ... The questions included whether the Department of Finance considered making the 2010 SIFT amendments retroactive, why it had changed its explanatory notes to say that s. 256(7)(c.1) "clarified" rather than "extended" the change-of-control rules and whether the Attorney General agreed that initially the policy choice of the SIFT conversion rules was to allow the use of existing corporations. ...

If Parliament had wanted them to be considered, it would have clearly so stated in subsection 245(4) of the Act, as it has done in a number of other provisions of the Act. Furthermore, even if Reg. 1100(11) could be considered in determining whether there was an abuse, there was none, given that it is quite common for a shareholder (or partner) to borrow in order to provide capital, and given that s. 245 cannot be used by the Minister as a tool to force taxpayers to structure a transaction in a manner most favourable to the tax authorities. ...