Depreciable Property
Cases
C.A.E. Inc. v. Canada, 2013 DTC 5084 [at 5944], 2013 FCA 92
The taxpayer leased or entered into leases by it of flight simulators it had manufactured. For financing reasons, it entered into sale and...
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| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7) - Paragraph 13(7)(a) | change in use on depreciable property conversion to inventory | 124 |
| Tax Topics - Income Tax Act - Section 45 - Subsection 45(1) - Paragraph 45(1)(a) | applied to conversion of depreciable property into inventory | 184 |
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Machinery and Equipment | 371 | |
| Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(1) - Paragraph 1102(1)(b) | 370 |
Bosa Bros. Construction Ltd. v. The Queen, 96 DTC 6193 (FCTD)
Prior to the acquisition by the taxpayer of the shares of another taxable Canadian corporation ("Topaz"), Topaz acquired from its then parent...
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|---|---|---|
| Tax Topics - General Concepts - Onus | 132 | |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(p) - Subparagraph 20(1)(p)(ii) | interest-free advances to US sub by developer | 35 |
| Tax Topics - Income Tax Act - Section 40 - Subsection 40(2) - Paragraph 40(2)(g) - Subparagraph 40(2)(g)(ii) | interest-free advances made only re loss protection | 49 |
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Real Estate | sale of stratified title property 1 year later on capital account/ secondary intention re ill-affordable property | 210 |
The Queen v. Construction Bérou Inc. (formerly Fortin & Moreau Inc.), 98 DTC 6401 (FCTD), rev'd 99 DTC 5841 (FCA)
The Quebec taxpayer leased various vehicles. It had possession and use of the trucks, it had assumed all risks, it had the option to purchase the...
Kettle River Sawmills Ltd. v. The Queen, 92 DTC 6525, [1992] 2 CTC 276 (FCTD)
A timber resource property constituted a depreciable property notwithstanding that the taxpayer had not claimed any capital cost allowance in...
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| Tax Topics - General Concepts - Effective Date | 37 |
Crown Cork & Seal Canada Inc. v. The Queen, 90 DTC 6586 (FCTD)
At the request of the taxpayer, the vendor of equipment purported to pass title in the equipment to the taxpayer in its 1979 taxation year....
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| Tax Topics - Income Tax Act - Section 163 - Subsection 163(2) | 60 |
Kirsch Construction Ltd. v. The Queen, 88 DTC 6503, [1988] 2 CTC 338 (FCTD)
The taxpayer did not acquire title to a roadpaver until after its taxation year-end of March 31, 1977 because the sale did not receive written...
Alberta Oil Sands Pipeline Ltd. v. The Queen, 88 DTC 6059, [1988] 1 CTC 99 (FCTD)
The taxpayer constructed a new pipeline. In order that any crude oil could be delivered at the end of the pipeline, it was necessary that the...
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|---|---|---|
| Tax Topics - General Concepts - Ownership | owner of continually changing linefill | 49 |
| Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 2 | 15 | |
| Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 8 | 15 |
The Queen v. Henuset Bros. Ltd. [No. 2], 77 DTC 5169, [1977] CTC 228 (FCTD)
The taxpayer executed on December 29, 1971 conditional sale contracts with a dealer for the purchase of 10 Caterpillar tractors which were then at...
The Queen v. Kimmel, 76 DTC 6259, [1976] CTC 443 (FCTD)
Both the purchaser and vendor of an apartment building wished to close in December 1968. However, the trustee who held the registered title...
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| Tax Topics - Statutory Interpretation - Reciprocity | 44 |
The Queen v. Lagueux & Freres Inc., 74 DTC 6569, [1974] CTC 687 (FCTD)
The taxpayer acquired machinery by having a rental company make the purchase and then entering into various leasing agreements with the rental...
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| Tax Topics - Statutory Interpretation - Provincial Law | 61 |
See Also
Agence du revenu du Québec v. 7958501 Canada Inc., 2022 QCCA 314
A private company (“SherWeb”), which provided, to paying customers, the use of software developed by it, transferred its software for...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7) - Paragraph 13(7)(e) | software that was not depreciable property to the transferor because it was written off as SR&ED was not subject to s. 13(7)(e) to the NAL transferee | 294 |
| Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(1) - Paragraph 1102(1)(d) | software written off as SR&ED was not depreciable property | 240 |
Garber v. The Queen, 2014 DTC 1045 [at 2812], 2014 TCC 1
The taxpayer bought units in a limited partnership, which was to acquire a large yacht to be used for catered vacation charters. The general...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose | expenses mere window-dressing | 135 |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) | no source required if reasonable expectation of income | 241 |
| Tax Topics - Income Tax Act - Section 3 - Paragraph 3(a) - Business Source/Reasonable Expectation of Profit | fraudulent scheme not a source | 240 |
| Tax Topics - Income Tax Act - Section 96 | GP had fraudulent intention | 241 |
| Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(1) - Paragraph 1102(1)(c) | asset was mere window-dressing | 146 |
Good Equipment Limited v. The Queen, 2008 DTC 2527, 2008 TCC 28
The taxpayer purchased farm equipment from a corporation ("Case") for sale or lease. to farmers. In the case of a lease transaction, it entered...
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|---|---|---|
| Tax Topics - Statutory Interpretation - Provincial Law | 92 |
Gordon v. The Queen, 95 DTC 493, [1995] 2 CTC 2185 (TCC)
A film that was described in evidence as being over 50% complete was found to be depreciable property described in Class 10 given that it was...
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|---|---|---|
| Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 10 | 100 |
Re Cronin Fire Equipment Ltd. (1993), 14 OR (3d) 269 (Ont. Ct. (G.D))
At the request of a customer ("Cronin"), a corporation ("Transportaction") acquired motor vehicles from a dealer, and then entered into agreements...
Laurent Goulet & Fils Inc. v. MNR, 92 DTC 1611 (TCC)
At the time the taxpayer contacted the lessor ("Hewitt") of equipment to it that it wished to exercise the purchase option, Hewitt suggested...
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| Tax Topics - Income Tax Act - Section 127 - Subsection 127(9) - Qualified Property | 182 |
Location Gaétan Lévesque Inc. v. MNR, 91 DTC 1380, [1991] 2 CTC 2795 (TCC)
The taxpayer entered into "leasing contracts" respecting heavy equipment which typically had a term of approximately five years, provided for...
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| Tax Topics - General Concepts - Ownership | lessee with purchase option not the beneficial owner | 117 |
Westcon Engineering and Contractors Ltd. v. MNR, 77 DTC 284, [1977] CTC 2387 (T.R.B.)
The taxpayer leased three forklift trucks and two trucks which it was entitled pursuant to options to purchase on the expiration of the leases...
C.R. Stewart Equipment Ltd. v. MNR, 77 DTC 176, [1977] CTC 2232 (T.R.B.)
Rent payments made by the taxpayer pursuant to crane rental lease agreements with a term of six months and purchase options for more than a...
Chibougamau Lumber Limitée v. MNR, 73 DTC 134, [1973] CTC 2174 (T.R.B.)
The taxpayer leased equipment from finance companies generally for a term of 36 months and with the option to acquire the equipment on expiry of...
Marine Midland Bank v. U.S., 687 F (2d) 395, 231 Ct. Cl. 496
Contracts of the taxpayer with the U.S. Air Force and Navy for the production of munition trailers stipulated that title would "forthwith vest" in...
Helby v. Matthews, [1895] A.C. 471 (HL)
A piano was let on hire on the basis that the hirer was to pay a monthly rent, could terminate the hiring by delivering the piano to the owner...
Administrative Policy
5 October 2018 APFF Roundtable Q. 16, 2018-0768871C6 F - Dépenses de bureau à domicile et d’automobile
In the course of a discussion of the deductibility of home office and automobile expense of an independent contractor where the property is held...
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| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7) - Paragraph 13(7)(g) | example of proration of capped s. 13(7)(g) capital cost | 157 |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A | capital cost of co-ownership interest | 74 |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Incurring of Expense | payment of expenses of taxpayer by another does not preclude “incurring” by taxpayer | 175 |
| Tax Topics - Income Tax Act - Section 9 - Nature of Income | payment of taxpayer’s expenses by another might give rise to s. 9 or 80 inclusion | 199 |
S3-F4-C1 - General Discussion of Capital Cost Allowance
Can be depreciable property even if CCA not yet claimed
Depreciable property
1.16 Property will meet the definition of depreciable property in...
7 February 2014 External T.I. 2014-0516921E5 F - Crédit et frais résiduels
Before going on to implicitly treat the lessee of automobile leases as the lessee rather than owner thereof, CRA stated:
In the Income Tax...
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| Tax Topics - Income Tax Act - Section 6 - Subsection 6(2) | employer potentially can choose to prorate terminal credits or deficiencies (based on sale price on car lease termination relative to residual value) in applying formula | 263 |
| Tax Topics - General Concepts - Substance | lease characterized as lease unless its actual legal effects differ | 154 |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A | lease under which lessee bore all risk implicitly treated as lease rather than purchase | 180 |
23 January 2012 External T.I. 2011-0409671E5 F - Propriété superficiaire
Corporation A erected, at its expense and for exclusive use in its transport business, a detached garage on the land on which the principal...
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| Tax Topics - Income Tax Act - Section 54 - Principal Residence - Paragraph (e) | land leased to corporation for business use not part of principal residence | 160 |
| Tax Topics - Income Tax Act - Section 15 - Subsection 15(1) | benefit if building constructed at corporation’s expense for business purposes becomes shareholder’s property by accession | 154 |
| Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(1) - Paragraph 1102(1)(c) | individual shareholder not entitled to claim CCA on building constructed by the corporation for use in its business even where taxpayer owns it | 160 |
| Tax Topics - General Concepts - Ownership | whether tenant had Quebec right of superficies to garage erected by it determined whether it was its property | 91 |
20 April 2009 External T.I. 2008-0303651E5 - Tax Implications of Leasing Arrangements
A purchase option will not result in the optionholder being considered to have acquired the property where there is no obligation on the part of...
20 April 2005 External T.I. 2005-0110421E5 F - ACB BUMP on an AMALGAMATION
Immediately prior to the amalgamation of Holdco with Opco, the only assets of Opco were woodlots. In finding that the cost of the land could not...
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| Tax Topics - Income Tax Act - Section 88 - Subsection 88(1) - Paragraph 88(1)(c) - Subparagraph 88(1)(c)(iii) | land included in timber limit is ineligible property | 122 |
27 January 2003 Internal T.I. 2002-0177677 - TERMINAL LOSS RENTAL PROPERTY
A taxpayer disposed of a rental property on which no CCA had ever been claimed because of the rental property restriction rule in Reg. 1100(11)...
5 July 2002 External T.I. 2002-0121115 F - CREDIT-BAIL
CCRA indicated that if, under a financing lease, the lessor remained the owner of the property under the governing provincial law (the Civil Code...
IT-464R, para. 3
A leasehold interest is not considered to be a depreciable property until a capital cost is incurred with respect to the property.
Income Tax Technical News, No. 5, 28 July 1995
Until several cases currently before the courts dealing with the issues pertinent to IT-233R have been rendered, the guidelines in that Bulletin...
93 C.P.T.J. - Q.20
An asset that otherwise meets the definition of CEE or CDE must always have its cost amortized in the form of capital cost allowance rather than...
30 December 1992 T.I. (Tax Window, No. 27, p. 6, ¶2322)
It is a question or fact whether a taxpayer has acquired a right to use computer software (which is included in Class 12(0)) or a right to market...
IT-441 dated November 29, 1979 "Capital Cost Allowance - Certified Feature Productions and Certified Short Productions"
Discussion of the requirements for a taxpayer to be considered to be the owner of a film.
90 C.R. - Q.16
Where a transaction is a lease, only the lessor is entitled to CCA. Conversely, where it is determined that the agreement results in a disposition...
88 C.R. - "Finance and Leasing" - "Leasing"
Since CCA accrues only to the owner of the property, where the transaction (having regard to the actual legal rights and obligations of the...
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| Tax Topics - General Concepts - Substance | 21 | |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) | 18 |
Articles
Gillespie, "Lease Financing", 1992 Corporate Management Tax Conference, c. 7
Discussion (at pp. 1-20) of the distinction between sales/acquisitions and leases.
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition | 12 |
Disposition of Property
Cases
Hewlett Packard (Canada) Ltd. v. Canada, 2004 DTC 6498, 2004 FCA 240
The taxpayer (who had an October 31 fiscal year end) followed a practice of purchasing a new fleet of cars from Ford to replace the fleet which it...
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| Tax Topics - Statutory Interpretation - Provincial Law | 89 |
Borstad Welding Supplies (1972) Ltd. v. The Queen, 93 DTC 5457, [1993] 2 CTC 266 (FCTD)
In connection with the sale of the taxpayer's business to an arm's length corporation, it was agreed that refillable cylinders would be rented by...
The Queen v. Browning Harvey Ltd., 90 DTC 6105, [1990] 1 CTC 161 (FCTD)
A manufacturer and distributor of softdrinks entered into agreements with shopkeepers under which: coolers were "sold" to the shopkeepers for $2,...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Improvements v. Repairs or Running Expense | 100 |
Consumers' Gas Company Ltd. v. The Queen, 82 DTC 6300, [1982] CTC 339 (FCTD), aff'd, 84 DTC 6058, [1984] CTC 83 (FCA)
Abandoned gas mains continued to be owned by the taxpayer and thus could not be said to have been "disposed of" by it. It thus could continue to...
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| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(g) | 33 | |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A | cost not reduced by reimbursement right therefor | 134 |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7.1) | 37 | |
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | compensation for relocating pipelines was capital | 32 |
Olympia and York Developments Ltd. v. The Queen, 80 DTC 6184, [1980] CTC 265 (FCTD)
It was held that since the taxpayer, by executing an agreement respecting the ultimate sale by it of apartment buildings, had "completely divested...
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| Tax Topics - Income Tax Act - Section 9 - Timing | 78 |
R. v. Malloney’s Studio Ltd., 79 DTC 5124, [1979] CTC 206, [1979] 2 S.C.R. 326
"Demolition of a building does not in ordinary parlance or arrangements produce an entitlement in the owner to proceeds of disposition where the...
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| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Proceeds of Disposition - Paragraph (c) | 53 | |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(28) | 38 | |
| Tax Topics - Income Tax Act - Section 68 | 152 |
See Also
Ipsco Inc. v. The Queen, 2002 DTC 1421 (TCC)
A lump sum which the taxpayer received in settlement of an action it brought because a "quench and temper" pipe treatment system that had been...
Robert Bédard Auto Ltée. v. MNR, 85 DTC 643, [1985] 2 CTC 2354 (TCC)
The taxpayer was found to have disposed of its land and building at the same time that it sold the balance of its business to a purchaser when it...
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|---|---|---|
| Tax Topics - General Concepts - Effective Date | 158 |
Freesman v. The Queen, [1982] 2 F.C. 900 (T.D.)
The owner ("Miss Glass") of a car "disposed of" it for purposes of the Customs Act when she entered into an agreement with the plaintiff under...
The Queen v. Cie Imm. BCN Ltée, 79 DTC 5068, [1979] CTC 71, [1979] 1 S.C.R. 865
The verb "to dispose" (which should receive the same meaning as the expressions "disposition", "proceeds of disposition" and " disposed of")...
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|---|---|---|
| Tax Topics - Other Legislation/Constitution - Federal - Official Languages Act - Section 13 | 87 | |
| Tax Topics - Statutory Interpretation - Interpretation/Definition Provisions | detailed definition not presumed exhaustive | 52 |
Picadilly Hotels Ltd. v. The Queen, 78 DTC 6444, [1978] CTC 658 (FCTD)
There was found to be a disposition or sale of a property by the taxpayer at the time of the closing of the agreement of purchase and sale in...
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| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(l) | 48 | |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(4) | 49 |
Administrative Policy
7 February 2013 External T.I. 2012-0436781E5 - Tax Treatment of Payment Received from Co-Tenant
CRA noted that "in Sussex Square Apartments, (99 DTC 443) the court concluded that a 'sublease' of the entire term of a lease operates as an...
8 June 2004 Internal T.I. 2004-0067401I7 F - Dépenses d'une entreprise illégale
The RCMP conducted a search of the business premises of the taxpayer, whose activity was illegal, and seized all equipment related to that...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Computation of Profit | onus on taxpayer, who did not keep records, to displace the net worth assessment method results | 177 |
| Tax Topics - General Concepts - Onus | onus on taxpayer, who did not keep records, to displace the net worth assessment results, with documentation or other “acceptable evidence” | 130 |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(16) | terminal loss when illegal equipment was forfeited to the Crown by court order | 122 |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Legal and other Professional Fees | legal fees incurred to defend criminal charges for carrying on an illegal drug business were non-deductible | 138 |
28 May 2004 Internal T.I. 2004-0065101I7 F - Tenures à bail - Catégorie 13 et loyers
The taxpayer carried on its business in rented premises to which it made leasehold improvements, and then relocated to leased premises (to which...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Start-Up and Liquidation Costs | rent on premises continued to be deductible after they were vacated | 136 |
| Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(1) - Paragraph 1102(1)(c) | vacated leased premises continued to qualify as Class 13 property | 136 |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7) - Paragraph 13(7)(a) | no change of use when premises were vacated | 180 |
2 December 1992 Memorandum (Tax Window, No. 27, p. 20, ¶2349, October 1993 Access Letter, p. 480)
A true abandonment of property, for example, where ownership of the property reverts to the Crown or accrues to the first finder and there is no...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition | 42 |
92 C.R. - Q.40
Where an investor decides to tear down a building and leave the land vacant, there will be a disposition of the building on demolition.
26 February 1992 T.I. (Tax Window, No. 17, p. 6, ¶1765)
A 99-year lease of residential suites by a condominium corporation to non-members in consideration for substantial up-front payments and nominal...
Proceeds of Disposition
Cases
Daishowa‑Marubeni International Ltd. v. Canada, 2013 DTC 5085 [at at 5959], 2013 SCC 29, [2013] 2 S.C.R. 336
The taxpayer sold the assets of a timber operation (including a timber licence) for a cash purchase price of $169 million, but with the purchase...
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| Tax Topics - Statutory Interpretation - Symmetry | harmonious, symmetrical scheme to be favoured | 75 |
Brill v. The Queen, 96 DTC 6572, [1997] 1 CTC 2 (FCA)
In finding that the proceeds of disposition for the sale by the taxpayer, following its default to the mortgagee, of its property pursuant to a...
The Queen v. Mohawk Oil Co. Ltd., 92 DTC 6135, [1992] 1 CTC 195 (FCA)
A lump sum of U.S. $6 million which the taxpayer received from a U.S. supplier in settlement of a claim for loss of profits and unrecovered costs...
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|---|---|---|
| Tax Topics - Other Legislation/Constitution - Federal - Federal Courts Rules - Rule 420 [Amendment of Pleadings] | 34 | |
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | damages received both for breach re depreciable property and lost profits | 70 |
Avril Holdings Ltd. v. Minister of National Revenue, 70 DTC 6366, [1970] CTC 572, [1971] S.C.R. 601
In rejecting an argument that recapture of depreciation should be reduced to reflect the fair market value of debentures received in consideration...
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|---|---|---|
| Tax Topics - Income Tax Regulations - Schedules - Schedule V | 69 |
Belle-Isle v. MNR, 64 DTC 5041, [1964] CTC 40 (Ex Ct), briefly aff'd 66 DTC 5100, [1966] R.C.S. 354
The taxpayer disposed of depreciable property to a corporation controlled by him in consideration for the assumption of a mortgage and the...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(4) | 84 |
See Also
Hewlett Packard (Canada) Ltd. v. The Queen, 2003 DTC 1324 (TCC), rev'd 2004 DTC 6498, 2004 FCA 240
Each year the taxpayer took delivery of a new fleet of automobiles from the vendor (Ford) for use by the taxpayer's employees and transferred...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Evidence | 105 | |
| Tax Topics - Income Tax Act - Section 45 - Subsection 45(1) - Paragraph 45(1)(a) | taking assets out of use not sufficient trigger | 145 |
Kamsel Leasing Inc. v. MNR, 93 DTC 250, [1993] 1 CTC 2279 (TCC)
After a customer had negotiated the purchase price with a supplier, the taxpayer would purchase equipment from the supplier and enter into a net...
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|---|---|---|
| Tax Topics - General Concepts - Evidence | 76 |
Tri-Star Leasing (London) Inc. v. MNR, 92 DTC 1786, [1992] 2 CTC 2099 (TCC)
Before finding that leases of equipment made by the taxpayer should be characterized as such rather than as conditional sales agreements, as...
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|---|---|---|
| Tax Topics - General Concepts - Ownership | 138 |
Robert v. MNR, 90 DTC 1281, [1990] 1 CTC 2407 (TCC)
After litigation between the taxpayers, who had interests in a MURB project, and the manager of the project, in which the manager alleged that the...
Terry v. MNR, 74 DTC 6017, [1973] CTC 837 (FCA)
Two companies after the sale of their operating fleets of vessels avoided recapture of depreciation by selling the proceeds of disposition to...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(e) | 23 |
Ages v. MNR, 71 DTC 86 (TAB)
A partnership agreed to lease real estate under a lease that ran for 25 years, that provided for a yearly rental of $27,396 payable in monthly...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Nature of Income | 144 |
Schouten v. MNR, 63 DTC 397 (TAB)
The taxpayer, which operated a fishing camp on land leased from the Crown, was unable to obtain the consent of a secured lender to a sale of that...
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|---|---|---|
| Tax Topics - General Concepts - Evidence | 32 |
Marcotte v. MNR, 60 DTC 519 (TAB)
A "lease with promise of sale" between the taxpayer and the supposed lessee was found to be an agreement of sale given that its terms were fully...
Foster v. M.N.R, 51 DTC 232 (ITAB)
Mr. Monet found that an agreement styled as a "lease and option to purchase" in fact was an agreement for the sale of a hotel and related assets...
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|---|---|---|
| Tax Topics - General Concepts - Substance | 36 |
Administrative Policy
7 June 2017 CPTS Roundtable, 2017-0695131C6
The 2014 Alberta CPA Roundtable, Q,1 indicated that the Daishowa principle applied to the resource industry. Since all industries are subject to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 66 - Subsection 66(15) - Canadian Resource Property - Paragraph (d) | Q.2 - a Canadian resource royalty interest requires a right to “take production” | 135 |
| Tax Topics - Treaties - Income Tax Conventions - Article 13 | Q.3 - Canada-U.K. Treaty does not exempt shares deriving their value from Canadian oil and gas licences – even where the Canadian business is carried on “in” them | 193 |
| Tax Topics - Income Tax Act - Section 115 - Subsection 115(1) - Paragraph 115(1)(a) - Subparagraph 115(1)(a)(ii) | Q.4 - by analogy to mining, hydrocarbons may be similar properties | 348 |
| Tax Topics - Income Tax Regulations - Regulation 1101 - Subsection 1101(1) | Q.5 - normal course dispositions of oil and gas properties generally are not of a separate business | 131 |
| Tax Topics - Income Tax Act - Section 4 - Subsection 4(1) | Q.5 - application of Scales test to determining whether there is a separate business | 224 |
| Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 26 | Q.7 - refinery catalysts are Class 26 property | 87 |
| Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 49 | Q.8 - taxpayers generally have the documentary evidence on hand to allocate costs between pipelines and pipeline appendages | 117 |
29 September 1994 Internal T.I. 9419767 - PROCEEDS OF DISPOSITION
Where an early buy-out occurs under a lease that does not permit early buy-outs, with the result that the lessor receives amounts in excess of the...
93 C.R. - Q. 42
Although specific references made in the definition to the reduction in a liability to a mortgagee, this provision is not all-inclusive and a...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition | 49 |
Paragraph (a)
Administrative Policy
20 July 2001 External T.I. 2001-0087205 F - BAIL TRAITEMENT DU PRENEUR
In providing background on the announcement in Income Tax Technical News No. 5 of the withdrawal of IT-233, CCRA stated:
[T]he purpose of the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Substance | distinction between a sale and a lease is based on the legal terms of the arrangement | 199 |
| Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(5) | whether a lessee has ownership of a building under an emphyteutic lease is a question of law | 117 |
Paragraph (c)
Cases
R. v. Malloney’s Studio Ltd., 79 DTC 5124, [1979] CTC 206, [1979] 2 S.C.R. 326
The compensation referred to in what now is s. 13(21)(d)(iii) is an amount received or receivable from a third person who has damaged, destroyed,...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Disposition of Property | 34 | |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(28) | 38 | |
| Tax Topics - Income Tax Act - Section 68 | 152 |
Zeal and Gold Ltd. v. MNR, 73 DTC 5116, [1973] CTC 129 (FCTD)
Although the taxpayer had not made proof of loss by the end of the taxation year in which its property was destroyed by fire, by that time one of...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 251 - Subsection 251(2) - Paragraph 251(2)(c) - Subparagraph 251(2)(c)(i) | 115 |
Paragraph (e)
Cases
Ipsco Inc. v. The Queen, 2002 DTC 1421 (TCC)
A lump sum which the taxpayer received in settlement of an action it brought because a "quench and temper" pipe treatment system that had been...
Timber Resource Property
Cases
Itt Industries of Canada Ltd. v. Canada, 2000 DTC 6445 (FCA)
A perpetual tree farm licence of the taxpayer was replaced by a 25-year licence as required by a new statutory regime. Shortly thereafter, the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Stare Decisis | 108 |
The Queen v. The Queen v. Kettle River Sawmills Ltd., 94 DTC 6086, [1994] 1 CTC 182 (FCA)
Rights of B.C. timber operators to cut timber in designated areas up to an allowable limit which they acquired well before 1974 nonetheless...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A | 99 |
Administrative Policy
6 February 2018 External T.I. 2017-0732151E5 - Timber Resource Property
A coniferous timber quota was received from the Alberta Government in 1967 (the “Original Quota”) that entitled the holder to harvest...
7 November 2011 Internal T.I. 2011-0424641I7 F - Right to cut Christmas trees
A taxpayer purchased the right to cut, over a period of 10 years, Christmas trees on another taxpayer's land for a lump sum payable over 4 years....
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(1) - Paragraph 1100(1)(e) | Christmas trees are not “timber” | 184 |
| Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 14 | right to cut Christmas trees with 10-year term was a Class 14 property | 134 |
8 April 1991 Memorandum (Tax Window, No. 4, p. 16, ¶1273)
Discussion of issues arising under the B.C. Crown Land for Agricultural Program.
Undepreciated Capital Cost
A
Cases
Water's Edge Village Estates (Phase II) Ltd. v. Canada, 2002 DTC 7172, 2002 FCA 291
In December 1991 the taxpayers (who were Canadian residents) acquired most of the partnership interests in a U.S. partnership ("Klink") that had...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 254 - Subsection 254(4) | 177 | |
| Tax Topics - Income Tax Act - Section 96 | exploiting modest business asset was sufficient partnership activity | 229 |
| Tax Topics - Statutory Interpretation - Resolving Ambiguity | 179 | |
| Tax Topics - Statutory Interpretation - Interpretation Act - Subsection 45(3) | prompt amendment evidenced intent to end anomaly | 88 |
Fletcher Challenge Canada Ltd. v. The Queen, 2000 DTC 6437 (FCA)
Following an amendment to the Forest Act (British Columbia) which gave holders of existing timber rights and privileges the entitlement to replace...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Application Rules - Subsection 20(1) | 101 |
Canada v. Construction Bérou Inc., 99 D.T.C 5869 (FCA)
The taxpayer entered into contracts for the leasing to it by finance companies of dump trucks which had a term of 65 months, required it to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(3) | 35 | |
| Tax Topics - Statutory Interpretation - Provincial Law | 61 |
Saskatchewan Wheat Pool v. R., 99 DTC 5198, [1999] 2 CTC 369 (FCA)
The taxpayers, who were members of a joint venture, did not capitalize interest costs incurred during the construction of a grain elevator under...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 21 - Subsection 21(1) | 139 |
The Queen v. The Queen v. Kettle River Sawmills Ltd., 94 DTC 6086, [1994] 1 CTC 182 (FCA)
Timber quotas which the taxpayers were deemed to have acquired after 1974 by virtue of their renewal of such rights after 1974 had a capital cost...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Timber Resource Property | 139 |
Newfoundland Light & Power Co. Ltd. v. The Queen, 90 DTC 6166, [1990] 1 CTC 229 (FCA)
Ten percent of all payments due to contractors by the taxpayer for various capital improvements were not payable by it until the contracts have...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Timing | liability re holdback amounts not yet ascertained | 79 |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(e) | 23 |
Hazlewood v. The Queen, 89 DTC 5537, [1990] 1 CTC 5 (FCTD)
In December 1970 the taxpayer contributed $500 to become a limited partner in a partnership which operated an apartment building. For its 1970...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 163 - Subsection 163(2) | 64 |
Edmonton Plaza Hotel (1980) Ltd. v. The Queen, 87 DTC 5371, [1987] 2 CTC 153 (FCTD)
In order to obtain a development permit to add a 72-room extension to its hotel, the taxpayer committed itself to either construct 27 additional...
Consumers' Gas Company Ltd. v. The Queen, 82 DTC 6300, [1982] CTC 339 (FCTD), aff'd, 84 DTC 6058, [1984] CTC 83 (FCA)
Amounts expended by the taxpayer to install new pipelines were additions to the capital cost of its depreciable assets notwithstanding that it was...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(g) | 33 | |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Disposition of Property | no disposition of abandoned gas mains | 38 |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7.1) | 37 | |
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | compensation for relocating pipelines was capital | 32 |
The Queen v. Gelber, 83 DTC 5385, [1983] CTC 381 (FCA)
It was virtually certain that, of the taxpayer's total cash investment of $38,333 for a share in a motion picture film, $30,000 would be returned...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 245 - Old | 109 |
Roywood Investments Ltd. v. The Queen, 81 DTC 5148, [1981] CTC 206 (FCA)
Since the buildings on the property purchased by the taxpayer were of little value and were, in fact, an obstacle to redevelopment of the...
Bomag (Canada) Ltd. v. The Queen, 81 DTC 5085, [1981] CTC 156 (FCTD), aff'd 84 DTC 6363, [1984] CTC 378 (FCA)
A payment made by a prospective franchisee to procure the surrender of a prior franchise so that it could obtain a franchise, was a proper element...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Purpose/Intention | 51 | |
| Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 14 | 72 |
Shabro Investments Ltd. v. The Queen, 79 DTC 5104, [1979] CTC 125 (FCA)
Costs of cleaning up a site were part of the capital cost of an improvement to a building.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Improvements v. Repairs or Running Expense | substantial improvement to floor cf. mere replacement | 69 |
Lipper v. The Queen, 79 DTC 5246, [1979] CTC 316 (FCTD)
It was found that a partnership, of which the taxpayer was a limited partner, had acquired two films at "a grossly and artificially inflated...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Accounting Principles | 44 | |
| Tax Topics - General Concepts - Fair Market Value - Other | 44 |
Mandel v. The Queen, 78 DTC 6518, [1978] CTC 780 (FCA), briefly aff'd 80 DTC 6148, [1980] CTC 130, [1980] 1 S.C.R. 318
A partnership purchased a film in an advanced state of production for a purchase price computed as the audited cost of production to the date of...
McKee v. The Queen, 77 DTC 5345, [1977] CTC 491 (FCTD)
A syndicate in which the taxpayer had a 1/16 interest purchased an interest in a film for a cash amount plus an additional amount which was...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 245 - Old | 15 | |
| Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 12 | 16 |
Simard-Beaudry Inc. v. M.N.R., 74 DTC 6552, [1974] CTC 715 (FCTD)
The amount paid by the taxpayer for an option to acquire depreciable assets was included in the cost of those assets when the option was exercised.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Agency | agent can act for two principals | 51 |
| Tax Topics - General Concepts - Sham | motives should not be exaggerated | 98 |
| Tax Topics - General Concepts - Tax Avoidance | motives should not be exaggerated | 98 |
| Tax Topics - Income Tax Act - Section 245 - Old | 134 |
Elias Rogers Co Ltd. v. MNR, 73 DTC 5030, [1972] CTC 601 (FCTD)
Jackett C.J. stated (at p. 5032) before going on to find that cost of installing water heaters leased to customers were not capital expenditures,...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Improvements v. Repairs or Running Expense | 120 |
MNR v. Wardean Drilling Ltd., 69 DTC 5194, [1969] CTC 265 (Ex Ct)
Before finding that the taxpayer had not "acquired" a drilling rig in its 1963 taxation year for purposes of the definition of "undepreciated...
Weinberger v. MNR, 64 DTC 5060, [1964] CTC 103 (Ex Ct)
The cost to the taxpayer of a patent included the legal expenses incurred in obtaining the patent, the research-related costs of developing the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Evidence | 50 | |
| Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(1) - Paragraph 1100(1)(c) | 70 |
See Also
The Queen v. Yelle, 2010 DTC 5128 [at 7083], 2010 ABPC 94
The taxpayers, accused of criminal evasion under s. 239(1)(a), moved for a directed verdict. The taxpayers were members of a partnership which...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) | time of dealing is relevant time | 127 |
| Tax Topics - Income Tax Act - Section 69 - Subsection 69(1) - Paragraph 69(1)(a) | 126 |
On-Line Finance & Leasing Corporation v. Canada, 2010 DTC 1325 [at 4243], 2010 TCC 475
Campbell J. rejected a submission of the Crown that leases acquired by the taxpayer had a nil cost to it because their acquisition was financed...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Evidence | parol evidence rule applied to Minister | 114 |
| Tax Topics - Income Tax Act - Section 9 - Nature of Income | 121 |
Alberta Power (2000) Ltd. v. The Queen, 2009 DTC 1514, 2009 TCC 412
Although the taxpayer continued to be the legal owner of a plant, the effect of the agreements between it and the Alberta government was that "all...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Ownership | person with the benefits and burdens of ownership was the beneficial owner | 243 |
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x) | definition of "reimbursement;" exclusion for legal obligation from legitimate negotiations | 220 |
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | amount was received in respect of impaired capital asset (which then was transferred to payor) rather than for lost profits | 111 |
Sherman v. The Queen, 2008 DTC 3069, 2008 TCC 186, aff'd 2009 DTC 5681, 2009 FCA 9
A warranty provided by a vendor of software rights to the taxpayer respecting the achievement of a business plan was commercially unrealistic. The...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(1) - Paragraph 1102(1)(c) | software acquired only for tax reasons | 24 |
Andrews v. The Queen, 2007 DTC 901, 2007 TCC 312 (Informal Procedure)
The position of the Minister was that a vehicle had been acquired by the taxpayer's mother and not by the taxpayer, so that the taxpayer was not...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Ownership | beneficial but not registered owner of auto entitled to CCA | 89 |
A & D Holdings Inc. v.The Queen, 2006 DTC 2219, 2005 TCC 768
Property that the vendors sold to the taxpayer contained chromium and the vendors did clean up work until the problem of contamination in runoff...
Terexcavation Antoine Grant Inc. v. The Queen, 2005 DTC 709 (TCC)
The taxpayer acquired a tractor for investment tax credit purposes at the time it entered into a leasing contract for the tractor under which...
Morley v. The Queen, 2004 DTC 2604, 2004 TCC 280, briefly aff'd 2006 DTC 6351, 2006 FCA 171
A partnership acquired Canadian rights to software in consideration for $960,000 in cash and an acquisition note in the amount of $12.15 million...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Other Legislation/Constitution - Charter (Constitution Act, 1982) - Section 8 | 38 | |
| Tax Topics - General Concepts - Evidence | 32 | |
| Tax Topics - General Concepts - Fair Market Value - Other | 98 | |
| Tax Topics - General Concepts - Onus | 100 | |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(27) - Paragraph 13(27)(d) | 88 | |
| Tax Topics - Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) | non-arm's length terms | 109 |
| Tax Topics - Income Tax Act - Section 96 | start-up activities sufficient to constitute carrying on business in common | 112 |
McCoy v. The Queen, 2003 DTC 660, 2003 TCC 332
A limited partnership purchased software from a vendor corporation in consideration for a cash payment and the issue by it of an "acquisition...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Evidence | 122 | |
| Tax Topics - General Concepts - Purpose/Intention | intention objectively determined having regard to the material presented to investors | 83 |
| Tax Topics - Income Tax Act - Section 96 - Subsection 96(2.2) - Paragraph 96(2.2)(d) | 118 | |
| Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(15) | 113 | |
| Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(1) - Paragraph 1102(1)(c) | 83 |
Brown v. The Queen, 2001 DTC 1094 (TCC), aff'd supra 2003 DTC 5298 (FCA)
Rip T.C.J. accepted the position of the Minister that a note issued by a partnership as part of the consideration for the purchase by it of...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Fair Market Value - Other | 209 | |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(27) - Paragraph 13(27)(d) | 143 | |
| Tax Topics - Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) | partnership purchase was NAL given that GP's shareholder acted in concert with vendor | 145 |
| Tax Topics - Income Tax Act - Section 96 - Subsection 96(2.2) - Paragraph 96(2.2)(d) | 69 | |
| Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(1) - Paragraph 1102(1)(c) | 56 |
Sun Life Assurance Co. of Canada v. R., 97 DTC 422, [1997] 3 C.T.C. 2593 (TCC)
Bowman TCJ. followed his earlier decision in Cadillac Fairview in finding that density rights purchased by the taxpayer from a nearby church were...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 1 - Paragraph 1(q) | 67 |
Cadillac Fairview Corp. Ltd. v. The Queen, 97 DTC 405, [1996] 2 CTC 2197 (TCC)
The taxpayer expended $11.2 million in obtaining zoning changes that were desirable for the proposed Phase II of the Eaton Centre (i.e.,...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 1 - Paragraph 1(q) | obtaining density for building expansion was land cost rather than Class 3 cost | 100 |
Wharf Properties Ltd. v. Commissioner of Inland Revenue (Hong Kong), [1997] BTC 173 (PC)
Lord Hoffmann stated (in obiter dicta, at p. 176) that "the wages of an electrician employed in the construction of a building by an owner who...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Financing Expenditures | 110 |
Gartry v. The Queen, 94 DTC 1947, [1994] 2 CTC 2021 (TCC)
The taxpayer was entitled to treat expenditures made by him on a vessel before it sank and before he acquired title to it as part of the capital...
Harvey v. The Queen, 94 DTC 1910 (TCC)
The capital cost to the taxpayer of a yacht, that he bought in Canada and then had transported to the British Virgin Islands in order to be...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Taxation Year | 89 |
Gold Line Transport Ltd. v. MNR, 92 DTC 2005, [1992] 2 CTC 2561 (TCC)
The taxpayer acquired a truck at the time property in the truck passed to it under the New Brunswick Sale of Goods Act, rather than at the later...
Berhad v. Director General of Inland Revenue, [1985] BTC 578 (PC)
The taxpayer felled and extracted lumber as a necessary step in the process of developing 7,000 acres of jungle into an oil palm plantation. Sums...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Expense Reimbursement | 48 |
The Queen v. Canadian Pacific Ltd., 77 DTC 5383, [1977] CTC 606 (FCA)
The full amount of expenditures which Canadian Pacific incurred to improve its property after it had been agreed that a third party would pay...
Denison Mines Ltd. v. Minister of National Revenue, 74 DTC 6525, [1974] CTC 737, [1976] 1 S.C.R. 245
The taxpayer sought to deduct capital cost allowance for the cost of driving passageways into an ore body. The Court agreed with the decision of...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Improvements v. Repairs or Running Expense | 64 | |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(28) | no double deduction | 38 |
Cockshutt Farm Equipment of Canada Ltd. v. MNR, 66 DTC 544, 41 Tax A.B.C. 386
The taxpayer purchased assets (including depreciable assets) on February 1, 1962 for a purchase price which was satisfied, in part, by the...
Administrative Policy
16 February 2024 External T.I. 2023-0984301E5 - Code 5 - Reducing inclusion under para 12(1)(x)
Capital expenditures (as opposed to current expenses) made by a company related to the construction of new affordable housing, or in converting...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7.1) | s. 13(7.1) applied automatically in priority to s. 12(1)(x) (or 13(7.4), if election) re government assistance for constructing or refurbishing accommodation | 207 |
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.2) | s. 12(2.2) election can be made for statutory deductions or amounts deductible under s. 9 in respect of affordable housing project | 173 |
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x) - Subparagraph 12(1)(x)(vi) | s. 13(7.1) (or s. 53(2)(k)) overrides the application of s. 12(1)(x) re government assistance to construct or repair affordable housing | 127 |
18 May 2022 Internal T.I. 2018-0788761I7 F - Amortissement – Travaux sur un bien loué et F&T
The taxpayer, which subleased premises on which were “Shells” consisting essentially of foundations, walls and roofs, installed wall and floor...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(5) - Paragraph 1102(5)(a) - Subparagraph 1102(5)(a)(iii) | rendering of an empty shell suitable for manufacturing constituted substantially changing its nature | 288 |
| Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 8 - Paragraph 8(b) | property does not satisfy the “solely” test in Class 8(b) where it was necessary for the proper functioning of the building | 265 |
| Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(4) | to be improvements or alterations to leasehold interest, property acquisitions must be assimilated to landlord’s property | 225 |
| Tax Topics - General Concepts - Ownership | leasehold improvements are assimilated to the landlord’s property unless the lease specifies otherwise | 101 |
| Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(5) | building shell was a building or structure/ addition refers to extension of structure | 294 |
5 October 2018 APFF Roundtable Q. 16, 2018-0768871C6 F - Dépenses de bureau à domicile et d’automobile
In the course of a discussion of the deductibility of home office and automobile expense of an independent contractor where the property is held...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7) - Paragraph 13(7)(g) | example of proration of capped s. 13(7)(g) capital cost | 157 |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Depreciable Property | depreciable property must be owned | 78 |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Incurring of Expense | payment of expenses of taxpayer by another does not preclude “incurring” by taxpayer | 175 |
| Tax Topics - Income Tax Act - Section 9 - Nature of Income | payment of taxpayer’s expenses by another might give rise to s. 9 or 80 inclusion | 199 |
6 October 2017 APFF Roundtable Q. 7, 2017-0709051C6 F - Dédommagement-annulation d'une offre d'achat
In 2016-0652851C6 F, as a result of breach of a purchaser's obligation to purchase a personal residence, the individual vendor received $50,000 in...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 54 - Capital Property | damages for breach of a purchaser's covenant were proceeds of a capital property | 170 |
S3-F4-C1 - General Discussion of Capital Cost Allowance
Architecture costs
1.18 A taxpayer might incur costs for architectural and engineering services used in preparing plans and estimates for a new...
7 October 2016 APFF Roundtable Q. 5, 2016-0652861C6 F - Véhicules électriques - rabais
The Quebec government subsidizes electric vehicle purchases through the payment of a rebate directly to a participating car dealer., this...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(e) | use of manufacturer’s electricity-use standard | 94 |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A | installation cost included | 37 |
| Tax Topics - Income Tax Act - Section 6 - Subsection 6(2) | Quebec government assistance does not reduce cost of purchased vehicle, but treated as compensation to dealer-lessor prorated over term of lease | 259 |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7) - Paragraph 13(7)(g) | vehicle assistance paid indirectly (to dealer) covered | 237 |
7 October 2016 APFF Roundtable Q. 5, 2016-0652861C6 F - Véhicules électriques - rabais
CRA stated:
[T]he installation costs of a capital property are part of its capital cost. Thus, the capital cost of a charging station for electric...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(e) | use of manufacturer’s electricity-use standard | 94 |
| Tax Topics - Income Tax Act - Section 6 - Subsection 6(2) | Quebec government assistance does not reduce cost of purchased vehicle, but treated as compensation to dealer-lessor prorated over term of lease | 259 |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7) - Paragraph 13(7)(g) | vehicle assistance paid indirectly (to dealer) covered | 237 |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A | cost not reduced under general principles by government assistance | 139 |
S4-F2-C1 - Deductibility of Fines and Penalties
1.20 If a fine or penalty is incurred in connection with the acquisition of an asset for which capital cost allowance (CCA) may be claimed, the...
7 February 2014 External T.I. 2014-0516921E5 F - Crédit et frais résiduels
A corporation ("Employer") leases automobiles from an arm’s length lessor ("Leasing Corporation") and provides the automobiles to employees. ...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Depreciable Property | lease/sale distinction established based on the legal relationship | 107 |
| Tax Topics - Income Tax Act - Section 6 - Subsection 6(2) | employer potentially can choose to prorate terminal credits or deficiencies (based on sale price on car lease termination relative to residual value) in applying formula | 263 |
| Tax Topics - General Concepts - Substance | lease characterized as lease unless its actual legal effects differ | 154 |
27 August 2012 External T.I. 2012-0438741E5 - Deductibility of Lease Payments
In response to a question as to whether montly lease payments under a five-year lease with a purchase option of $X would be deductible, CRA...
28 October 2010 Internal T.I. 2010-0376041I7 F - Contrat d'acquisition ou de location
Motor vehicle lease agreements provide that the lessee will automatically acquire ownership after making specified rent payment, and with the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 6 - Subsection 6(2) - Element E | lease where lessee got benefits of ownership even if it didn’t acquire title needed study to determine its true nature | 171 |
| Tax Topics - General Concepts - Substance | contracts (e.g., leases) generally not recharacterized in the absence of sham | 267 |
10 November 2008 External T.I. 2007-0237551E5 F - Vente à tempérament
In indicating that the purchaser under an instalment sale became entitled to claim CCA on depreciable property upon taking possession even though...
9 June 2005 Internal T.I. 2004-0105421I7 F - Déductibilité des frais juridiques et d'intérêts
The taxpayer, who had contracted with a construction firm for the firm to enlarge the taxpayer’s building, failed to pay invoices of the firm...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Damages | legal fees to defend against claim for unpaid construction fees on building addition were on capital account | 126 |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(ii) | interest paid pursuant to a judgment requiring payment of construction fees would be deductible but for s. 18(3.1) | 165 |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(3.1) | interest paid pursuant to a judgment requiring payment of construction fees would be capitalized to the construction costs to the extent of accrual during construction period | 165 |
30 July 2004 External T.I. 2004-0083841E5 F - Développement informatique
Before noting that the treatment of a computer system development project could only be addressed in response to a ruling request, CRA stated:
In...
16 December 2003 External T.I. 2002-0133665 - CONDITIONAL SALES AGREEMENTS
(See also 5 December 2003 TI 2002-015757): With respect to the situation where a "lender" financed the purchase from a third-party vendor of...
28 June 2001 External T.I. 2001-0069865 F - CRÉDIT-BAIL
In confirming its more recent position that a lease is a lease, CCRA indicated that cancelled IT-233R and Construction Bérou should not be...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(3) | Construction Bérou interpretation of s. 248(3) was erroneous | 179 |
10 May 2001 External T.I. 2001-0066095 F - CREDIT-BAIL
After indicating that Construction Bérou had incorrectly interpreted the scope of s. 248(3), CRA referenced its current “lease is a lease”...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(3) | Construction Bérou did not comment on the CCRA’s current position on what is a lease | 223 |
2001 Ruling 2000-003987
A sublease was found to be a lease transaction because this was its legal form and legal substance. There was no option to purchase, and the risks...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x) | compensation for assuming contingent liabilities | 31 |
20 January 1999 External T.I. 9832305 - LEASING FEES AS BUSINESS EXPENSES
"Generally, we will rely on the assumption that the form of a particular lease agreement reflects the true relationship between the parties so...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Substance | 42 |
17 April 1998 External T.I. 9720785 - SALE - INTELLECTUAL PROPERTY - PATENT PENDING
Where a payment is made to a person who has purchased the rights to a patent once it is granted, the payment is included in the purchaser's...
10 February 1997 Internal T.I. 9701277 - PURCHASE AND SALE AGREEMENT - PART I.3
Because a condition precedent under an agreement for purchase and sale of a depreciable asset had not yet been satisfied, there was no addition to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 181 - Subsection 181(3) | 47 | |
| Tax Topics - Income Tax Act - Section 181.2 - Subsection 181.2(3) | 47 |
9 June 1995 External T.I. 9511455 - CONTINGENCIES AND RESERVES SALE OF A BUSINESS
"... When a business is sold and contingent liabilities of the vendor are assumed by the purchaser as part of the consideration of the sale...
14 August 1992 T.I. 921331 (May 1993 Access Letter, p. 192, ¶C20-070)
Software is acquired by a person where there has been an absolute transfer of all intellectual property interests in the software and where the...
10 January 1991 Memorandum (Tax Window, Prelim. No. 3, p. 31, ¶1084)
The amount of GST payable on the purchase of depreciable property may be included in the capital cost of the property, with input tax credits of...
89 C.M.T.C - "Capitalization of Soft Costs - Buildings under Construction" - "Types of Costs to which Subsection 18(3.1) Applies
"soft costs do not include those items, such as the cost of building permits, site preparation, architectural and engineering fees, costs of...
84 C.R. - Q.74
Whether the capital cost of assets financed with limited-recourse loans will be adjusted depends on the facts of the particular case.
81 CR - Q.23
The cost of property to a person cannot exceed the lesser of the purchase price of the property acquired and the amount put "at risk" by the...
IT-441 dated November 29, 1979 "Capital Cost Allowance - Certified Feature Productions and Certified Short Productions"
Where the acquisition of a certified production is financed by the issue of a non-interest bearing note, the note must be discounted to reflect...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Ownership | 19 | |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Depreciable Property | 19 | |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition | 75 |
IT-464R "Capital Cost Allowance - Leasehold Interest"
IT-477, para. 20
Where expenses related to the acquisition of a Class 14 property are incurred in the year prior to the year in which the property is acquired,...
E
Cases
St. Benedict Catholic Secondary School Trust v. Canada, 2022 FCA 125
The taxpayer (the “Trust”) had losses for its 1997 to 2003 taxation years as a result of CCA claimed on its principal asset (a Class 13...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(a) - Revising Claims | taxpayer was precluded from changing previous CCA claims | 301 |
See Also
St. Benedict Catholic Secondary School Trust v. The Queen, 2020 TCC 109, aff'd 2022 FCA 125
The taxpayer claimed capital cost allowance (“CCA”) on Class 13 depreciable property for its 1997 through 2003 taxation years (the “Initial...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(a) - Revising Claims | CCA claims could not be subsequently reversed to refresh losses | 252 |
Envision Credit Union v. The Queen, 2010 DTC 1399 [at 4585], 2010 TCC 576, aff'd 2012 DTC 5055 [at 6842], 2011 FCA 321, aff'd 2013 DTC 5144 [at 6275], 2013 SCC 48
An amalgamation of two credit unions that did not qualify as an amalgamation under s. 87(1) nonetheless resulted in the amalgamated corporation...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 152 - Subsection 152(4) - Paragraph 152(4)(a) - Subparagraph 152(4)(a)(i) | incorrect position was thoughtfully taken | 63 |
| Tax Topics - Income Tax Act - Section 87 - Subsection 87(4.3) | 52 | |
| Tax Topics - Statutory Interpretation - Redundancy/reading in words | 50 |
Administrative Policy
2 November 2023 APFF Roundtable Q. 8, 2023-0982881C6 - Revision of Capital Cost Allowance Claims
The taxpayer in St. Benedict was unsuccessful in trying to effectively regenerate non-capital losses that had expired by reversing CCA claims so...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(a) - Revising Claims | CRA will continue on a discretionary basis to accept revisions to prior years’ CCA claims for nil-income years | 346 |
29 July 2015 Internal T.I. 2015-0575921I7 - Recapture arising in statute-barred years
If, as a result of the erroneous inclusion of acquired property (e.g., property which was not acquired for an income-producing purpose) in a class...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(1) | negative UCC balance arising in statute-barred year becomes recapture in 1st open year | 460 |
| Tax Topics - Income Tax Act - Section 152 - Subsection 152(4) | negative UCC balance arising in statute-barred year becomes recapture in 1st open year | 155 |
F
See Also
Duncan v. The Queen, 2001 DTC 96 (TCC)
The taxpayers purported to buy interest in a U.S. partnership owning a computer whose original capital cost had been completely depreciated for...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 96 | purported new partners in loss partnership did not carry on business in common | 159 |
Wang Canada Ltd. v. MNR, 91 DTC 1279, [1991] 2 CTC 2773 (TCC)
The taxpayer had acquired computer equipment, claimed capital cost allowance and then in a subsequent year disposed of the equipment on income...
Administrative Policy
8 November 2006 External T.I. 2006-0176171E5 F - Revente d'un bien amortissable - alinéa 13(7)e)
Corporation A sold a building having a cost of $3,800,000 to an associated corporation (Corporation B) for its FMV of $4,200,000, so that s....
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7) - Paragraph 13(7)(e) | no deemed CCA class for s. 13(7)(e) denial | 96 |
| Tax Topics - Income Tax Act - Section 39 - Subsection 39(1) - Paragraph 39(1)(b) - Subparagraph 39(1)(b)(i) | capital loss denied on sale of building – proceeds reflected in UCC reduction | 108 |
7 April 2005 External T.I. 2005-0109721E5 - GST Penalty in a Wash Transaction
The 4% GST penalty paid by a vendor of depreciable property in a "wash transaction" would be deducted from the proceeds of sale of the depreciable...
G
Cases
Canterra Energy Ltd. v. The Queen, 85 DTC 5245, [1985] 1 CTC 329 (FCTD), rev'd 87 DTC 5019, [1987] 1 CTC 89 (FCA)
It was noted, obiter, that "it may be argued that a negative amount could enter into the calculation ... under section 13(21)(f)(v) if the costs...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 65 | 40 | |
| Tax Topics - Statutory Interpretation - Hansard, explanatory notes, etc. | 36 |
J
Administrative Policy
4 October 2002 Internal T.I. 2002-0139807 F - REMBOURSEMENT DE TPS
An employee who, for Year I, claimed a GST rebate relating to CCA claimed on a Class 10.1 motor vehicle, but only became entitled to the rebate in...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 6 - Subsection 6(8) - Paragraph 6(8)(b) | GST rebate claimed by employee re CCA on car after its sale reduces UCC pursuant to J of formula rather than under s. 13(7.1) | 98 |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7.1) | GST rebate claim reduced UCC pursuant to J of formula rather than under s. 13(7.1, since claimed after asset’s disposition | 64 |
Vessel
Administrative Policy
12 March 2012 Internal T.I. 2011-0431631I7 F - Catégorie d'amortissement- maison flottante
Before finding that a floating home qualified as a vessel as defined in the Canada Shipping Act, 2001, CRA stated:
Subsection 13(21) defines a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 7 | portable floating home qualified as “vessel” | 114 |
| Tax Topics - Statutory Interpretation - Interpretation Act - Section 44 - Paragraph 44(h) | IA s. 44(h) applied to reference definition in replacement Canada Shipping Act | 48 |
25 November 2010 External T.I. 2010-0377841E5 F - Catégorie d'amortissement - bateau
In determining that a boat that lacked means of propulsion qualified as a “vessel” per Class 7(c), CRA found that, in light of s. 44(h)) of...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 7 - Paragraph 7(c) | “vessel” includes a moored boat without a motor | 133 |
| Tax Topics - Statutory Interpretation - Interpretation Act - Section 44 - Paragraph 44(h) | “vessel” informed by meaning in replacement Canada Shipping Act | 166 |