Cases
Ollenberger v. Canada, 2013 DTC 5064 [at 5863], 2013 FCA 74
The taxpayer was entitled to recognize a business investment loss on a loan owing to him by a Canadian-controlled private corporation ("AES") which was not repaid. The trial judge erred in finding that "active business" in the small business corporation definition meant anything more than "any business carried on by the taxpayer," as set out in the applicable part of the definition of "active business" in s. 248(1), i.e., there was no basis for the Minister's contention that the business must be "active" in the ordinary sense of that word.
As the Minister effectively acknowledged in the Amended Reply that AES carried on a business, the requirements of the definition were satisfied.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Small Business Corporation | active business included passive business | 116 |
| Tax Topics - Income Tax Act - Section 39 - Subsection 39(1) - Paragraph 39(1)(c) | 116 |
Canadian Marconi v. R., 86 DTC 6526, [1986] 2 CTC 465, [1986] 2 S.C.R. 522
"'Active business' is nowhere restricted to a manufacturing or processing business."
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 125.1 - Subsection 125.1(3) - Canadian Manufacturing and Processing Profits | actively managed cash of corporation gave rise to active business income | 143 |
| Tax Topics - Statutory Interpretation - Resolving Ambiguity | 50 |
See Also
Hurley Mining Equipment & Services Inc. v. MNR, 89 DTC 403, [1989] 2 CTC 2101 (TCC)
Interest income which the corporate taxpayer, which was in the business of selling and servicing equipment used in the mining industry, earned on term deposits was held to be active business income. Although the term deposits were pledged as collateral to a bank, it was not established that such collateral was truly required by the bank. In addition, at no time in the three taxation years did the taxpayer find it necessary to have recourse to the term deposits to fund its working capital needs.
Administrative Policy
24 August 1992 T.I. (Tax Window, No. 23, p. 15, ¶2162)
Recapture of depreciation will be considered to be income from the same category of business (i.e., active or non-active) as that in which the assets were employed. However, where depreciable property that was used in a business is converted to rental property, the full amount of recapture will consider to be income from property, except where rental income is earned only for very short time while the property was being sold.