Section 190.12 - Taxable capital


National Trustco v. The Queen, 96 DTC 6234, [1996] 2 CTC 72 (FCTD)

The taxpayer was in error when in computing its capital for purposes of s. 190.12, it deducted from its total book reserves the total of all tax reserves allowed under Part I of the Act. Instead, the language of s. 190.12(b)(iv) required that the taxpayer total all of its book reserves other than those which are permitted to be deducted for tax purposes. Accordingly, where a particular tax reserve exceeds its matching book reserve, a negative amount should not be included in the calculation of capital.