Cases
Valley Equipment Limited v. Canada, 2008 DTC 6200, 2008 FCA 65
Damages received by the taxpayer (a John Deere dealer) in settlement of its action against John Deere for wrongful termination of its dealership...
Mollinaro v. The Queen, 2000 DTC 6114 (FCA)
Pursuant to an agreement in which the taxpayer's holding company agreed to sell all the shares of a pizza manufacturing company ("Pizza Crust") to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Substance | 144 | |
| Tax Topics - Income Tax Act - Section 5 - Subsection 5(1) | 144 |
Bellingham v. The Queen, 96 DTC 6075, [1996] 1 CTC 187 (FCA)
An award of "additional interest" received by taxpayer pursuant to s. 66(4) of the Expropriation Act (Alberta) (a provision which required...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(c) | 124 | |
| Tax Topics - Income Tax Act - Section 3 | 123 | |
| Tax Topics - Income Tax Act - Section 9 - Computation of Profit | 77 |
Prince Rupert Hotel (1957) Ltd. v. The Queen, 95 DTC 5227, [1995] 2 CTC 212 (FCA)
A lump sum settlement received by the taxpayer from its solicitors for their negligence in drafting partnership agreements in such a manner that...
Pe Ben Industries Co. Ltd. v. The Queen, 88 DTC 6347, [1988] 2 CTC 120 (FCTD)
A payment made by Northern Alberta Railway ("NAR") to the taxpayer as compensation to the taxpayer for the termination by NAR of a major contract...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 14 - Subsection 14(5) - Cumulative Eligible Capital | 109 | |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Property | contractual right was a property right or chose in action | 93 |
| Tax Topics - Income Tax Act - Section 4 - Subsection 4(1) - Paragraph 4(1)(a) | 37 | |
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | compensation for loss of business line | 79 |
The Queen v. Demers, 86 DTC 6411, [1986] 2 CTC 321 (FCA)
Although the price stipulated in the agreement for the sale of shares of a corporation was $7,800,000, the agreement (in clause 3(t)) also...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 40 - Subsection 40(1) - Paragraph 40(1)(a) - Subparagraph 40(1)(a)(i) | fmv deficiency an outlay | 204 |
See Also
656203 Ontario Inc. v. The Queen, 2003 DTC 405, 2003 TCC 264
The taxpayer had failed to show that the allocation of the Minister of amounts received by it in settlement of two actions brought against its...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business | 129 | |
| Tax Topics - Income Tax Act - Section 9 - Expense Reimbursement | 129 |
Estate of Myrth May Stuart v. The Queen, 2003 DTC 329, 2003 TCC 171, aff'd supra.
An agreement for the sale by the deceased taxpayer of her home provided that the purchase would not be completed until 60 days after third reading...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 54 - Principal Residence | 85 |
BP Canada Energy Resources Co. v. The Queen, 2002 DTC 2110 (TCC)
The taxpayer, which was a Canadian natural gas producer, received a lump sum as compensation for the losses it was considered to have suffered as...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | 195 |
Molstad Development Co. v. R., 97 DTC 913, [1997] 2 CTC 2360 (TCC)
After the taxpayer sold land inventory at a loss for proceeds less than the amount owing to the bank that had financed the property, and the bank...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Forgiveness of Debt | forgiveness of debt used to finance inventory | 87 |
Wighton v. The Queen, 96 DTC 1310 (TCC)
The sum of $200,000 received by the taxpayer in settlement of his legal action to enforce his alleged right of first refusal in a commercial lease...
Fielder v. Vedlynn Ltd., [1992] BTC 347 (Ch. D.)
The taxpayer sold shares with substantial accrued losses to eight subsidiaries for their fair market value and for the right to deferred payment...
Sénécal v. MNR, 93 DTC 1155, [1993] 2 CTC 2218 (TCC)
The taxpayer sold land to a corporation of which he was a minority shareholder for $90,000 in cash and a non-interest bearing promissory note for...
J.F. Burns Sand & Gravel v. MNR, 68 DTC 226 (TAB)
The taxpayer agreed to rent five acres of land for a period of three years at a rent of $1,600 per annum, and provided the lessee with the option...
Administrative Policy
23 May 2013 External T.I. 2012-0472101E5 F - Emphytéose - disposition de terrain
A corporation ("Corp.") sold a vacant lot in its inventory to a municipality ("City") for a price of $X. City granted an emphyteusis to Corp. for...
16 December 2008 External T.I. 2008-0279741E5 F - Renonciation au capital d'une fiducie
An individual transfers shares to a trust of which he is the trustee, and he, his wife and children are the capital and income beneficiary. In...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 75 - Subsection 75(2) | settlor’s valid renunciation of capital interest (but not income interest) prior to trustees’ exercise of discretion to distribute a capital gain would avoid application of s. 75(2)(a)(i) | 199 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(9) - Disclaimer | legally impossible for a beneficiary of a discretionary trust to partially renounce income from a specific trust property | 262 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition - Paragraph (i) | non-disposition distribution of non-taxable portion of trust capital gains avoids a gain under s. 107(2.1) | 375 |
| Tax Topics - Income Tax Act - Section 69 - Subsection 69(1) - Paragraph 69(1)(b) | s. 69(1) does not apply to a renunciation of trust capital interest since no disposition "to" any person | 44 |
| Tax Topics - Income Tax Act - Section 56 - Subsection 56(2) | s. 56(2) inapplicable to renunciation of capital interest in a trust | 45 |
| Tax Topics - Income Tax Act - Section 56 - Subsection 56(4) | s. 56(4) inapplicable to disclaimer of capital interest in a trust | 43 |
12 March 2002 Internal T.I. 2001-0094067 F - DEDOMMAGEMENT - TITRE DE PROPRIETE
After his discovery that his separated common-law spouse (Madame) was selling a property in which he had a ½ co-ownership interest, Monsieur...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 3 - Paragraph 3(a) | damages received for separated spouse’s unlawful use of taxpayer’s property were tax-free receipts | 132 |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Legal and other Professional Fees | legal fees incurred in ownership dispute were capital expenditures | 130 |
20 December 2002 Internal T.I. 2002-0147967 - TAX IMPLICATIONS CONTRACT TERMINATION
Damages received by two management advisors for terminations of their management advisory agreements with a REIT represented proceeds of...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 6 - Subsection 6(3) - Paragraph 6(3)(e) | 99 | |
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | termination of advisory agreemment with external MFT manager gave rise to capital receipt | 271 |
21 January 2002 External T.I. 2001-0078735 F - Droit de recevoir une somme
The shareholders of a Canadian-controlled private corporation (Xco) agreed to sell their Xco shares to a public corporation (Yco) in consideration...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(g) | s. 12(1)(g) inapplicable to contingent right to receive deferred cash sales proceeds to the extent the share consideration declined in value | 220 |
| Tax Topics - Income Tax Act - Section 85 - Subsection 85(1) - Paragraph 85(1)(f) | s. 85(1)(f) applicable to contingent right to receive deferred cash sales proceeds to the extent the share consideration received under s. 85(1) declined in value | 138 |
21 August 1995 External T.I. 9519755 - PROCEEDS OF DISPOSITION
In response to a question concerning s. 2 of the Partition of Property Act (B.C.), RC stated "if real property is jointly owned by three...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 44 - Subsection 44(1) | 95 |
24 March 1995 External T.I. 9507295 - SALE PRICE OF SHARES - CLOSING
Discussion whether an increase in the sale price of shares between the date of an agreement of sale and the closing date represents interest or an...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(e) | 34 |
93 C.R. - Q. 42
Although specific references are 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 13 - Subsection 13(21) - Proceeds of Disposition | 50 |
5 April 1991 T.I. (Tax Window, No. 3, p. 6, ¶1268)
RC's assessing policy that under a farm-out it is not possible to ascertain the value of the consideration flowing between the parties and,...
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| Tax Topics - Income Tax Act - Section 66 - Subsection 66(12.1) | 49 |
89 C.R. - Q.7
Where a vendor of property is not in the business of dealing in the type of property to be sold, a forfeited deposit ordinarily will be a capital...
Paragraph (a)
See Also
Ritchie v. The Queen, 2018 TCC 113
A farmer, who rented his farm to his corporation, received an early “signing bonus” of $255,790 from Enbridge for entering into an agreement...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x) - Subpargraph 12(1)(x)(viii) | an early signing bonus was part of the proceeds of disposition of the subject property | 307 |
Deragon v. The Queen, 2015 TCC 294
The taxpayer and two other trusts (the “vendors”) agreed effective May 1, 2004 to sell shares of various private companies (the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(g) | reverse earnout amounts included in proceeds | 245 |
| Tax Topics - General Concepts - Effective Date | proceeds reduced by subsequent settlement pursuant to price adjustment clause | 205 |
Administrative Policy
23 March 2011 Internal T.I. 2010-0389081I7 F - Disposition of a resource property
The Vendor sold a percentage interest in mineral claims (the “Mining Properties”) for consideration including deferred cash payments and...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 66.2 - Subsection 66.2(5) - cumulative Canadian development expense - Element F | proceeds from mineral claims sale included undiscounted deferred cash proceeds, but might exclude share consideration until issued; purchaser’s CEE obligation excluded | 390 |
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(g) | deferred share consideration potentially not recognized until issuance | 103 |
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(b) | full undiscounted amount of future cash consideration to be included as an amount receivable | 209 |
30 July 2001 External T.I. 2001-0091655 F - Produit de Disposition pour Action
The shareholders of Opco agreed to sell each Opco share for a sale price of $10, which was to be satisfied at their option in cash or by the...
Paragraph (b)
Administrative Policy
30 October 2024 Internal T.I. 2023-0996541I7 - Capital gain or loss in Mt. Gox insolvency
The Directorate indicated that if the taxpayer (contrary to its understanding of the facts) had been the beneficial owner of bitcoin held by a...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 54 - Disposition - Paragraph (a) | no disposition by platform users on its insolvency until they became entitled to payout | 236 |
2 November 2023 APFF Roundtable Q. 9, 2023-0982911C6 - APFF - Congrès 2023 - Table ronde sur la fiscalité
Madame Y made a cash purchase of a bitcoin on a central exchange platform in order that she could ultimately pay for items online. Subsequently,...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Loss v. Loss - Damages | bitcoin loss from fraud might be capital loss, and timing of a loss could be governed by s. 44(2) | 241 |
| Tax Topics - Income Tax Act - Section 54 - Personal-Use Property | bitcoin to be used for online purchases is not personal-use property | 82 |
4 April 2002 External T.I. 2002-0123065 F - DOMMAGES-INTERETS
Under a program established by the French government in 1999, victims of spoliation (or their heirs) as a result of the anti-Semitic legislation...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 3 - Paragraph 3(a) | annuities or capital sums paid to victims of anti-Semitic persecution were not income | 114 |
Paragraph (d)
Cases
The Queen v. Shaw, 93 DTC 5121, [1993] 1 CTC 221 (F.C.A.)
The farm lands of the taxpayer were expropriated pursuant to the Expropriation Act (Alberta) in 1977. Following the settlement in 1986 of an...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(c) | 190 | |
| Tax Topics - Income Tax Act - Section 16 - Subsection 16(1) | requires distinguishing of capital sum and interest | 123 |
| Tax Topics - Income Tax Act - Section 44 - Subsection 44(2) - Paragraph 44(2)(a) | 130 |
Damka Lumber & Development Ltd. v. The Queen, 90 DTC 6101, [1990] 1 CTC 127 (FCTD)
Although the taxpayer sold its property to an agent acting for an undisclosed principal (which was the Urban Transit Authority of British...
Sani Sport Inc. v. The Queen, 87 DTC 5253, [1987] 1 CTC 411 (FCTD), aff'd 90 DTC 6230 (FCA)
Compensation in respect of expropriation proceedings by Hydro Quebec affecting the lands of the taxpayer in which it was carrying on a sports...
E.R. Fisher Ltd. v. The Queen, 86 DTC 6364, [1986] 2 CTC 114 (FCTD)
An interest penalty which the taxpayer received pursuant to s. 33(3)(b) of the Expropriation Act as a result of the initial failure of the Crown...
See Also
Drummond v. Brown, [1984] BTC 142 (C.A.)
S.22(3)(a) of the Finance Act 1965 subjected to capital gains tax "capital sums received by way of compensation for any kind of damage or injury...
IRC v. Metrolands (Property Finance) Ltd., [1982] BTC 8032 (HL)
Property was characterized as having been "acquired compulsorily by an authority possessing compulsory powers" (s.45(4), Development Land Tax Act,...
Choice Realty Corp. v. The Queen, 78 DTC 6415, [1978] CTC 613 (FCTD)
The taxpayer purchased lands on the basis that amounts payable to the vendor as a result of the expropriation of a portion of the lands would be...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(n) | s. 20(1)(n) reserve not claimed in alternative until subsequent years was statute-barred | 140 |
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Real Estate | 123 |
Administrative Policy
5 March 2008 External T.I. 2007-0231831E5 F - Roulement de biens
It was submitted that were two individuals (Mr. A nor Mr. B ) who are equal co-owners of two rental properties apply for partition and the court...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 44 - Subsection 44(1) - Paragraph 44(1)(a) | court-directed sale of co-owned property as a substitute for partition is not a “taking” by either co-owner of the other’s property | 240 |
7 October 1991 T.I. (Tax Window, No. 10, p. 23, ¶1505)
The expropriating authority of a foreign government may be considered to be a "statutory authority".
18 September 89 T.I. (February 1990 Access Letter, ¶1107)
Proceeds of disposition received from a partition or a licitation do not fall within ss.13(21)(d)(iv) or 54(h)(iv) because (under Quebec law) in a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition | 92 |
Paragraph (e)
Administrative Policy
16 July 2020 Internal T.I. 2019-0817271I7 F - Indemnités reçues à la suite de la négociation
A governmental authority will acquire a number of residential, commercial, forestry, agricultural and undeveloped properties for a construction...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x) | compensation paid to land owners for their restoration of the portion of their lands not sold to the government would be a s. 12(1)(x) receipt | 122 |
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(f) | compensation for damages to depreciable property would be included under s. 12(1)(f) rather than under proceeds of disposition, but the related repaid expenses would be deductible | 126 |
25 May 2001 Internal T.I. 2001-0085000 - Bituminous sands in-situ projects
CRA noted that notwithstanding the definition of "proceeds of disposition" (the receipt of which is deemed to give rise to a disposition):
"In the...
11 June 1996 External T.I. 9616545 - COMPENSATION FOR EXPROPRIATED LAND
Discussion of tax treatment of compensation received by property owners for the compulsory granting by them of right-of-way easements.
Paragraph (f)
Administrative Policy
4 March 2015 External T.I. 2014-0550761E5 F - 44(1) et disposition partielle
Insurance proceeds received for the destruction of part of a building qualified as "compensation for property damaged" (para. (f) of the "proceeds...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(f) | inclusion of insurance proceeds applied to building repair | 116 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Former Business Property | part of building treated as former business property | 165 |
| Tax Topics - Income Tax Act - Section 44 - Subsection 44(1) | partial destruction of building | 197 |
22 January 2004 External T.I. 2003-0006191E5 F - Frais et montant reçus lors de poursuite
A broker was sued for his alleged mismanagement of the portfolios (held on capital account) of a holding corporation, its principal shareholder...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 15 - Subsection 15(1) | legal fees paid by corporation in suit by it and its shareholder and his RRSP should be allocated pro rata to them even though the joint incremental costs were minimal | 190 |
| Tax Topics - Income Tax Act - Section 40 - Subsection 40(1) - Paragraph 40(1)(a) - Subparagraph 40(1)(a)(i) | legal fees for successfully suing broker for portfolio mismanagement would reduce the resulting capital gain on receipt of the damages | 138 |
10 April 2003 Internal T.I. 2002-0177767 F - INDEMNITE RECUE PAR UN ARTISTE
An artist who sold title to one of his works, discovered several years later that the work has been partially destroyed by the new owner, and...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Property | the moral rights of an artist were property | 97 |
Paragraph (g)
Cases
Dunne v. The Queen, 96 DTC 6400 (FCTD)
After the taxpayer went into default on a MURB property, the mortgagee acquired the property in a public auction pursuant to its reserve bid...
Paragraph (j)
Administrative Policy
84 C.R. - Q.46
S.54(h)(x) does not reduce the proceeds of disposition of property that is not capital property.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(28) | 22 |