Cases
Kruger Incorporated v. Canada, 2016 FCA 186
The taxpayer ("Kruger") engaged in extensive trading of FX options, mostly writing European style puts and calls, although it also purchased FX...
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| Tax Topics - Income Tax Act - Section 9 - Timing | non-statutory mark-to-market accounting was permissible under s. 9 | 468 |
| Tax Topics - Income Tax Act - Section 171 - Subsection 171(1) | Minister implicitly directed to reduce taxpayer's income below that originally filed | 100 |
Canadian Imperial Bank of Canada v. Canada, 2000 DTC 6207 (FCA)
Before finding that gold and silver bullion of the taxpayer qualified as inventory, Sharlow J.A. indicated (at p. 6210):
"Property is 'described...
The Queen v. Hollinger Inc., 99 DTC 5500, [1999] 4 CTC 61 (FCA)
The taxpayer, as the result of a series of transactions, acquired companies whose shares had a nominal fair market value but a substantial...
Canada v. Pardee Equipment Limited, 99 DTC 5012, [1999] 1 CTC 101 (FCA)
The taxpayer, which was a farm equipment dealer, was found to have received equipment from the distributor (Deere Canada) on consignment, rather...
Cargill Ltd. v. R., 98 DTC 6126, [1998] 2 C.T.C. 192 (FCA)
The taxpayer, which operated licensed grain elevators, would sell grain that was still owned by the producers who had delivered the grain to the...
Friesen v. Canada, 95 DTC 5551, [1995] 3 S.C.R. 103
Major J. found that a real estate property held by the taxpayer and others in connection with an adventure or concern in the nature of trade...
The Queen v. Bastion Management Ltd., 94 DTC 6272, [1994] 2 CTC 70 (FCTD), aff'd 95 DTC 5238 (FCA)
The taxpayer, which was a trader in commodity futures, purchased 15,000 ounces of gold and 500,000 ounces of silver shortly before its year-end...
Friesen v. The Queen, 93 DTC 5313, [1993] 2 CTC 113 (FCA), rev'd supra.
In his concurring reasons for judgment, Marceau J.A. found that a single property held in connection with an adventure or concern in the nature of...
West Hill Redevelopment Co. Ltd. v. The Queen, 91 DTC 5430, [1991] 2 CTC 83 (FCTD)
The taxpayer (a real estate developer) held mortgages which it received on the sale of condominiums to maturity. Because there is no evidence that...
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| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(b) | mortgages included in proceeds at their principal amount rather than lower FMV | 55 |
| Tax Topics - Income Tax Act - Section 16 - Subsection 16(1) | not applicable where mortgages receivable were all on income account | 151 |
Stearns Catalytic Ltd. v. The Queen, 90 DTC 6286, [1990] 1 CTC 398 (FCTD)
A stock of spare parts which were held indefinitely until such time, as if any, as they were required as a result of break-downs at two production...
The Queen v. Mattabi Mines Ltd., 89 DTC 5357, [1989] 2 CTC 94 (FCTD), aff'd 92 DTC 6252 (FCA)
After making particular reference to the meaning of "incorporated into" and "processed into," Teitelbaum J. accepted the submission of the Crown...
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| Tax Topics - General Concepts - Onus | 67 | |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(gg) | 77 |
The Queen v. Dresden Farm Equipment Ltd., 89 DTC 5019 (FCA)
Goods held by the taxpayer were not inventory because they were not owned by the taxpayer.
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| Tax Topics - Income Tax Act - Section 178 - Subsection 178(2) | 12 | |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Cost Amount | 45 |
Saskatchewan Co-Operative Credit Society Ltd. v. The Queen, 85 DTC 5599, [1986] 1 CTC 53 (FCA)
The absence of a finding that the taxpayer was a trader or had otherwise acquired shares intending to turn them to profit by resale precluded a...
Saskatchewan Wheat Pool v. The Queen, 85 DTC 5034, [1985] 1 CTC 31 (FCA)
Grains that were owned by another person nonetheless formed part of the taxpayer's inventory because variations in the grains' quality or quantity...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 10 - Subsection 10(1) | 35 | |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(gg) | 76 | |
| Tax Topics - Statutory Interpretation - Resolving Ambiguity | 39 |
Qualico Developments Ltd. v. The Queen, 84 DTC 6119, [1984] CTC 122, 84 DTC 6126 (FCA)
At 6124:
"[T]he stock in trade of a business is that which the business offers for sale in the ordinary course of its trade. An item not so...
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| Tax Topics - Income Tax Act - Section 10 - Subsection 10(1) | landscaping an addition to inventory cost | 53 |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(aa) | inventory costs not included | 321 |
| Tax Topics - Income Tax Act - Section 9 - Timing | 40 | |
| Tax Topics - Statutory Interpretation - Scheme | 67 |
The Queen v. Jawl Industries Ltd., 74 DTC 6133, [1974] CTC 147 (FCTD)
Lumber which the taxpayer had contracted to purchase but which would not become property of the taxpayer until the time of delivery in a...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(e) | 112 |
Minister of National Revenue v. Freud, 68 DTC 5279, [1968] CTC 438, [1969] S.C.R. 75
Before finding that the taxpayer has sustained a fully deductible loss on advances which he had made to a business venture, Pigeon J. stated (pp....
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Loss v. Loss | loan loss sustained on speculative start-up venture | 156 |
Minister of National Revenue v. Curlett, 67 DTC 5058, [1967] CTC 62, [1967] S.C.R. 280
The taxpayer, who advanced money at a substantial discount on second mortgage loans, was found to be engaged in a money-lending business....
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| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Loans/receivables | sale of mortgage portfolio to own company not characterized as sale of going concern | 91 |
Ted Davy Finance Co. Ltd. v. MNR, 64 DTC 5124, [1964] CTC 194 (Ex Ct)
Proceeds received by the taxpayer, which carried on the business of purchasing conditional sales contracts (mostly from a related used car dealer)...
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| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Account Receivable | sale of conditional sales contracts and chattel mortgages occurred on sale of business | 102 |
Wilson and Wilson Ltd. v. MNR, 60 DTC 1018, [1960] CTC 1 (Ex Ct)
Materials used by a contractor in performing services under contracts were not inventory.
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| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(b) | 138 | |
| Tax Topics - Income Tax Act - Section 9 - Accounting Principles | 25 | |
| Tax Topics - Income Tax Act - Section 9 - Timing | 142 |
See Also
Kruger Incorporated v. The Queen, 2015 DTC 1127 [at 788], 2015 TCC 119, rev'd 2016 FCA 186
The taxpayer traded foreign currency options, with its principal option activity being the writing of European-style puts and calls. Rip J found...
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| Tax Topics - Income Tax Act - Section 10 - Subsection 10(1) | options contracts purchased, but not those written, were inventory | 200 |
| Tax Topics - Income Tax Act - Section 4 - Subsection 4(1) - Paragraph 4(1)(a) | paper manufacturer's large-scale options-trading operation was a separate business | 166 |
| Tax Topics - Income Tax Act - Section 9 - Timing | realization principle applied to FX options written by taxpayer | 307 |
Malo v. The Queen, 2012 DTC 1214 [at 3588], 2012 TCC 75 (Informal Procedure)
After finding that the taxpayer's losses from his stake in a tree-planting operation could not be deducted by virtue of failing to comply with the...
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| Tax Topics - Income Tax Act - Section 237.1 - Subsection 237.1(1) - Tax Shelter | 125 | |
| Tax Topics - Income Tax Act - Section 3 | 159 | |
| Tax Topics - Income Tax Act - Section 9 - Timing | 102 |
Kelly, Douglas & Co. Ltd. v. MNR, 76 DTC 1090 (T.R.B.)
Supplies of stationery and special forms on hand at the end of the year were not inventory because they had no market value at all and were of no...
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| Tax Topics - Income Tax Act - Section 10 - Subsection 10(1) | purchases of stationery could be deducted when acquired | 96 |
Administrative Policy
18 July 2022 External T.I. 2021-0887121E5 - Feeder Cattle Loan Guarantee Program
In order to assist its members in the production of feeder cattle, a feeder cattle finance cooperative established under the Co-operative...
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| Tax Topics - General Concepts - Ownership | members of a corporate co-op likely were the beneficial owners of the co-op cattle inventory notwithstanding the documentation’s contrary label | 206 |
29 January 2015 Internal T.I. 2014-0544651I7 - Section 85 transfer of Swap Contracts
CRA found that cross-currency swaps with accrued gains, which for redacted reasons were considered to be held on income rather than capital...
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| Tax Topics - Income Tax Act - Section 85 - Subsection 85(1.1) | swap contract treated as inventory | 180 |
| Tax Topics - Income Tax Act - Section 85 - Subsection 85(1) | swap contract recorded on securities rather than inventory line of T2057 | 251 |
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Foreign Exchange | swap contract treated as inventory | 55 |
21 December 2004 External T.I. 2004-0085481E5 F - Titres détenus par une compagnie d'assurance
After noting that units of a mutual fund trust held by an insurance company are not "mark-to-market property," CRA indicated that, based on
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| Tax Topics - Income Tax Act - Section 142.2 - Subsection 142.2(1) - Mark-to-Market Property | MFT units not mark-to-market property | 61 |
7 November 1996 External T.I. 9628025 - MANDATORY INVENTORY ADJUSTMENT
"Where an amount of the purchase price is allocated for unharvested trees in the field, these trees would be considered purchased inventory ..."
88 CPTJ - Q.17
Where the acquirer of seismic data is acquiring the data solely for resale, the cost is viewed as not being CEE but the cost of an inventory item....
IT-473 "Inventory Valuation"
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| Tax Topics - Income Tax Act - Section 10 - Subsection 10(1) | 0 |
IT-51R2 "Supplies On Hand at the End of a Fiscal Period"
Included in inventories are expenditures for assets which good financial reporting dictates should be deferred and not written off until the year...
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| Tax Topics - Income Tax Act - Section 10 - Subsection 10(5) | 0 |
IT-345R "Special reserve - Loans secured by mortgages", para. 2
loans made by a taxpayer in a money-lending business do not qualify as inventory.
IT-466 "Trust Companies"
mortgage loans are not inventory.
Articles
Henry, "Contingent Loan Loss Reserves of Financial Institutions", 1985 Conference Report, pp. 45:13-17
Loans are inventory of money-lending institutions