Proceeds of Disposition

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...

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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...

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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...

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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...

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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...

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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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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...

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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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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...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 9 - Compensation Payments 195

Molstad Development Co. Ltd. v. The Queen, 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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Locations of other summaries Wordcount
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...

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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...

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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...

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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...

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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...

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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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Locations of other summaries Wordcount
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

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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Locations of other summaries Wordcount
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

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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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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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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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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Locations of other summaries Wordcount
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...

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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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Locations of other summaries Wordcount
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...

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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...

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Words and Phrases
sale price
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

Paragraph (d)

Cases

The Queen v. Shaw, 93 DTC 5121, [1993] 1 CTC 221 (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...

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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...

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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...

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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...

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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...

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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,...

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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...

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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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Locations of other summaries Wordcount
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...

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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...

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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...

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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...

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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

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...

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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) 20