Subsection 11(1) - Proprietor of business
3 March 1994 T.I. 940429 (C.T.O. "Adventure in the Nature of Trade-Fiscal Period")
It is a question of fact whether an adventure or concern in the nature of trade constitutes the carrying on of a business, so that an election may be made under s. 25(1) where there is a disposition of the property concerned.
Subsection 11(2) - Reference to “taxation year”
14 May 1990 T.I. (October 1990 Access Letter, ¶1458)
S.11(2) is applicable only for the calculation of business income and has no bearing on the investment tax credit, which is based on the "qualified expenditures" made during the taxation year, which in the case of an individual is the calendar year.
Crystal Beach Park Limited v. The Queen, 2006 DTC 2845, 2006 TCC 183
Two business associates ("Tiburzi" and "Gelder") acquired 15,000 of the 30,000 common shares of the taxpayer (with the other 15,000 common shares being acquired by them in trust for a third party), and all of the 15,000 special shares of the taxpayer, which were convertible, upon the unanimous resolution of the holders, into common shares of the taxpayer. In finding that Tiburzi and Gelder were not a group of persons, Sheridan J. noted that their past business dealings with each other had not engendered the kind of relationship that might cause one or the other of them to be able to influence the other to vote in accordance with his wishes, and that there were no agreements by them to act in concert. Accordingly, they did not represent a group that had acquired control of the taxpayer. Furthermore, even if there had been an acquisition of control of the taxpayer, the essence of the business of the taxpayer (which before the acquisition of the shares involved running an amusement park and thereafter included development work to utilize the property also as a marina and as a residential units development) was the exploitation of a recreational site, so that the same business was carried on at the site both before and after the acquisition by Tiburzi and Gelder of their shares.
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