Expense Reimbursement

Cases

Manrell v. Canada, 2003 DTC 5225, 2003 FCA 128, rev'd 2003 DTC 5225, 2003 FCA 128

rev'd on other grounds 2003 DTC 5225, 2003 FCA 128

Consideration received by the taxpayer for giving a non-compete covenant on the sale of shares of companies owned by him directly or through holding companies was found to be a non-taxable capital receipt.

Bellingham v. The Queen, 96 DC 6075 (FCA)

"Additional interests" received for the expropriation of land held on income account was a tax-free receipt because it was, in substance, similar to a punititive damage award.

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 27

The Queen v. TCG International Inc., 96 DTC 6547 (FCTD)

tenant inducement

In finding that the decision of the Court of Appeal in the Ikea case established that a tenant inducement payment received by the taxpayer was fully taxable, Gibson J. stated (at p. 6549):

"No distinction can be drawn from the fact that the premises here in question were head office premises, as opposed to wholesale and retail sales outlet premises. I am satisfied that head office activities and the premises at which those activities are carried on are equally as integral to the business operations of a limited company such as the Defendant as are wholesale and retail premises."

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 98

Harrowston Corp. v. The Queen, 96 DTC 6544 (FCA)

recovery of non-deductible amount

The taxpayer's entitlement under s. 215(6) in respect of non-resident withholding tax that it had failed to deduct from interest payments made to a non-resident holder of its debt, and which was unrecoverable from the non-resident and a non-resident assignee, did not qualify as a deductible bad debt because, if the amount had been recovered, it would not have had the character of income.

Winemaker v. The Queen, 96 DTC 6040 (FCA)

gift rceeived in course of business

In affirming the finding of the Toronto judge that a "gift" received by a practising solicitor in order induce him to act in connection with a Florida real estate project was income, Marceau J.A. stated (at p. 6041):

"... While it may be that a person would confer some money to another with whom he has business dealings as a tribute or testimonial, and not as a payment for his services, whether or not it is so in a particular instance is essentially a question of fact ..."

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 86

The Queen v. Remington, 94 DTC 6549 (FCA)

The taxpayer, who through various companies was engaged in real estate - related activities, requested a $900,000 inducement in offering to lease vacant space in a building. This sum was to be made available to him after the taxpayer had sublet the space. In a side deal, the taxpayer was provided with an additional $100,000 in view of an increase in the quoted annual rent and that the offer to lease had finally concluded.

In finding that the $900,000 was a taxable receipt, Mahoney J.A. noted that the taxpayer had signalled his intention of engaging in the business of subletting the premises and, had this arrangement been carried out, his business profit would have been entirely dependent upon the receipt of the inducement.

The $100,000 clearly was a taxable receipt, although the taxpayer was permitted to deduct an off-setting reserve under s. 20(1)(l)(i).

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 140

R. v. Fogazzi, 93 DTC 5183 (Ont CA)

Funds received for investment by the accused from his Italian relatives were found to have been misappropriated by him in connection with a business given that the the funds were received by him in the normal course of the operation of his investment business and his dishonest act took place in connection with the operation of that business. Accordingly, the misappropriated amounts consitituted income from a business.

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 67

Johnson & Johnson Inc. v. The Queen, 92 DTC 6373 (FCTD)

A federal sales tax refund was taxable income given that the receipt was linked to the taxpayer's income-earning process (the price at which the taxpayer sold its products included the federal sales tax, although the taxpayer felt it had no responsibility to pass on the amount of the refund to its customers).

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 52

Suzy Creamcheese (Canada) Ltd. v. The Queen, 92 DTC 6291 (FCTD)

Leasehold inducements or allowances which a company in the retail women's clothing business received from landlords in connection with opening up 13 new stores were capital receipts. Collier J. stated that "I do not agree that the number of lease transactions entered into by the plaintiff taxpayer here, with ensuing payments, was a business activity converting the receipts into income" (p. 6293).

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 60

The Queen v. Rumack, 92 DTC 6142 (FCA)

A "cash for life" lottery of $1,000 per month won by the taxpayer which was funded through the purchase by the Ontario Association for the Mentally Retarded of an annuity on the taxpayer's life from an insurance company was income. The facts that the payments were "periodic, regular, certain, foreseeable, expected and enforceable", and were to endure for the taxpayer's lifetime, were indicative of their income character.

Inshore Investments Ltd. v. The Queen, 92 DTC 6162 (FCTD)

A written agreement between the taxpayer (a venture capital corporation) and another corporation ("Taiga") provided for the sale by the taxpayer of shares and debentures of Taiga back to Taiga and for the payment to the taxpayer of $250,000 "on account of special management services which the [taxpayer] acknowledges had been performed by [Taiga]". The taxpayer was not permitted to resile from this characterization of the $250,000 as a taxable fee for services given that the agreement had been signed after negotiation with the benefit of legal counsel, and in light of evidence that the taxpayer in fact had provided significant management services to Taiga.

Kay v. Coffin, 91 DTC 5350 (Ont HCJ.)

Description of a structured settlement on which Revenue Canada had favourably ruled.

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 12

Woodward Stores Ltd. v. The Queen, 91 DTC 5090 (FCTD)

tax-free fixturing allowances

The taxpayer, which was a well-known general merchandiser operating 24 department stores in Western Canada, negotiated and received "fixturing allowances" of $3,000,000 and $750,000 on leasing premises for two stores in Red Deer and Calgary. The actual amounts expended on fixtures exceeded the allowances. Joyal J. found, in light of the fact that the inducements were applied to capital improvements and in light of the accounting treatment of the payments (which was to credit them to the cost of the improvements) that they were tax-exempt receipts.

Balanko v. MNR, 88 DTC 6228, [1988] 1 CTC 317 (FCTD)

The gains of an inveterate gambler were not taxable. A statement of Judge Bonner was adopted that "there is a total absence of any evidence here which indicates the presence of any organized system for the minimization or management of risk."

French Shoes Ltd. v. The Queen, 86 DTC 6359, [1986] 2 CTC 132 (FCTD)

The taxpayer, which operated 22 shoe stores in various leased premises, was found to negotiate leases as a very important part of its business. A sum of $50,000 which it received as its condition for entering into a lease was a taxable profit. "[I]ncentive payments, inducements, generally form part of the revenue of the taxpayer. The payment is received as a result of the business activity carried on by the taxpayer and would not have otherwise been received."

Berhad v. Director General of Inland Revenue, [1985] BTC 578 (PC)

The taxpayer felled and extracted lumber as a necessary step in the process of developing 7,000 acres of jungle into an oil palm plantation. Sums which it realized from the sale of timber were a deduction from the cost of its plantation assets rather than income receipts.

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Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A receipts during development reduced cost rather than being income 46

R. v. Christensen, 83 DTC 5359 (BCSC)

Proceeds from the operation of an illegal bookmaking business were income.

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 11

The Queen v. Cranswick, 82 DTC 6073, [1982] CTC 69 (FCA)

It was held that an amount of $3.35 per share, which the majority shareholder of a company voluntarily paid in cash to shareholders of that company (who chose not to accept an alternative offer of the majority shareholder to purchase their shares for $26 per share) in order to avoid a possible complaint by them about the sale of part of the company's assets at less than their sale price in a previous deal which had fallen through, was not the sort of payment that one would expect to earn from shares and was thus a non-taxable "windfall". [C.R: 9 - "Compensation Payments"]

The Queen v. Audet, 78 DTC 6554, [1978] CTC 788 (FCTD)

An amount of $8,000 earned by the individual taxpayer as a fee for guaranteeing a loan of $50,000 made to his friends constituted income from a business.

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 25

Alberta Gas Trunk Line Co. Ltd. v. Minister of National Revenue, [1972] S.C.R. 498, 71 DTC 5403, [1971] CTC 723

Gas transportation contracts under which the taxpayer was entitled to receive payments in U.S. dollars from shippers of natural gas were characterized as entitling the taxpayer to payment in U.S. dollars for the services provided by it, rather than containing separate promises by the shippers to (a) pay for the cost of transporting their gas and (b) indemnify the taxpayer against any exchange loss arising from its U.S.-dollar borrowings.

Philp v. MNR, 70 DTC 6237, [1970] CTC 330 (Ex Ct)

The Oshawa Group pursuant to a sales incentive program paid the costs of a six-day excursion to the Bahamas of a partner ("Bermack") in a firm which carried on a retail food business and which was a customer to which The Oshawa Group supplied groceries and other goods. The excursion was devoted to recreational activities, with the exception of a two-hour business session for three mornings. After stating (at p. 6242) that if the trip represented something of value to Bermack "it seems obvious that that something arose from its business and that the value of it represented a gain or profit from his business", Thurlow J. went on to find that the portion of the value of the trip which represented such a profit was 1/2 of the cost to The Oshawa Group.

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Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) sales incentives paid to 3rd-party employees were taxable benefits 127
Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business incentive trip to Bahamas 132
Tax Topics - Income Tax Act - Section 9 - Nature of Income incentive trip to Bahamas 132

See Also

Peek v. The Queen, 2007 DTC 602, 2007 TCC 152

Sums which the taxpayer obtained fraudulently through a cheque kiting operation were income from a business given the frequency (several cheques daily) and magnitude of the transactions.

Leblanc v. The Queen, 2007 DTC 307, 2006 TCC 680

The two taxpayers, who together won over $5.5 million during a four year period from playing sports lottery parlay games, were found to not be subject to tax under s. 9 on those winnings and to have realized the gains as exempt capital gains under s. 40(2)(f). Bowman C.J. found that the large number of bets placed by them was not itself indicative of anything other than a tendency to bet heavily and accepted expert testimony that given the rigid game structure, artificial winning caps and the minimal impact (if any) of sports-related knowledge, sports lottery parlay games offered overwhelming odds against players succeeding on a regular basis, so that they could not reasonably expect to earn a profit. The taxpayers were not professional gamblers who assessed the risks, minimized them and relied on inside information and knowledge and skill but, instead, would more accurately be described as compulsive gamblers.

Pellerin c. La Reine, 2006 DTC 3341, 2006 TCC 383 (Informal Procedure)

Amounts received by the taxpayer from her son while he was suffering partial, permanent incapacity from a traffic accident did not represent income from employment or income from services rendered but, instead, represented amounts given by him to her in appreciation for what she had done for him.

Rocovitis v. Dominion of Canada General Insurance Co. (2005), 63 OR (3d) 402 (CA)

An exclusion in an insurance policy for loss resulting from engaging in a "trade, profession or occupation" did not apply to an individual doing odd jobs for a minimal payment. Not all activities generating profits will be automatically classified as "business" activities.

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 insurance company following the destruction of its sawmill by fire as between replacement of lost income (fully taxable business income), proceeds of disposition of building and compensation for loss of goodwill (eligible capital amounts) was unreasonable. In response to a submission of the taxpayer that a portion of the damages were non-taxable punitive damages, Lamarre T.C.J. stated (at p. 414):

"Bearing in mind that punitive damages are normally awarded by a court for malicious and oppressive misconduct, it would be surprising if the Insurers would have voluntarily agreed to pay damages to the appellant on that basis."

Ipsco Inc. v. The Queen, 2002 DTC 1421 (TCC)

A lump sum which the taxpayer received in settlement of an action it brought because a "quench and temper" pipe treatment system that had been installed at its pipe manufacturing plant did not perform to specifications, was an exempt receipt rather than proceeds of disposition of depreciable property. There was no disposition of depreciable property on general principles (as the taxpayer did not abandon or transfer its assets), nor was there "compensation for property injuriously affected" under paragraph (e) of the definition of "proceeds of disposition" given that this phrase referred only to consequential damage to other property where expropriation of a particular property had occurred.

C.I.R. (New Zealand) v. Wattie & Anor., [1998] BTC 438 (PC)

Before going on to find that a lump sum received by an accounting firm in consideration for entering into a lease of office premises was a capital receipt, Lord Nolan stated (at p. 446) that:

"The crucial question is whether in all the circumstances, the payment or receipt can properly be attributed to a particular year."

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 55

Frank Beban Logging Limited v. The Queen, 98 DTC 1393 (TCC)

A gratuitous lump sum payment made by the B.C. government to the taxpayer to compensate the taxpayer for having banned logging in the area in which the taxpayer had been carrying on logging operations was an exempt receipt.

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 39

Fortino v. The Queen, 97 DTC 55 (TCC), briefly aff'd on procedural grounds 2000 DTC 6060 (FCA)

Lump sums received by individual vendors of shares in consideration for their entering into non-competition agreements with the purchaser were characterized as being for their surrender of a potential source of profit and, therefore, represented capital receipts that were not taxable under s. 3.

Murray Barrett Ltd. v. MNR, 94 DTC 1886 (TCC)

A lump sum received by the taxpayer in settlement of a claim against a solicitor for professional negligence was an exempt capital receipt.

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 23

Campbell v. MNR, 92 DTC 1855 (TCC)

A self-employed individual who provided Christian teachings at three evening sessions per week received offerings given at these sessions and included them in his income. In addition, amounts of $500 which were paid to him every two weeks on a purely voluntary basis by a construction company owned equally by three first cousins, were required to be included in his income. Teskey J. stated (p. 1856) that he saw "no difference between the Appellant and the musician standing on a street corner playing a violin and receiving money from passersby".

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 88

Fleur de Lys Warehousing Ltd. v. MNR, 91 DTC 1343 (TCC)

Garon J. rejected a submission of the taxpayer that a refund of municipal taxes was non-taxable because it simply amounted to a reduction of an expense already made and, under GAAP, there was no change to income and expense at the time the refund was received or became receivable.

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Tax Topics - Income Tax Act - Section 9 - Timing 55

Buckman v. MNR, 91 DTC 1249 (TCC)

Funds misappropriated by a solicitor were income to him.

Molony v. MNR, 90 DTC 1394 (TCC)

The taxpayer was not in the business of gambling. His trait placed him "on the road to certain financial ruin" and, accordingly, he had no reasonable expectation of profit.

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 29

IRC v. Aken, [1990] BTC 352 (C.A.)

Profits from prostitution were subject to charge under Schedule D. There was no evidence that such profits represented earnings from an illegal trade.

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 23

Potvin v. MNR, 90 DTC 1644 (TCC)

The taxpayers, who managed two large apartment buildings and lived in one of the suites on a rent-free basis, realized an income benefit equal to 25% of the fair market rental value of the suite which they occupied.

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 37

Hall v. MNR, 90 DTC 1431 (TCC)

The taxpayer received a subsidy in order to render a piece of land suitable for the cultivation of blueberries and not with respect to the operation of the blueberry farm. The purpose of the subsidy legislation was to generate additional jobs and not to increase income. Accordingly, this subsidy was a capital receipt to the taxpayer.

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 56

Mackenzie v. Arnold (1952), 33 TC 363 (C.A.)

Royalties received by the taxpayer after becoming a U.K. resident that were in respect of novels that the taxpayer wrote while he was a non-resident of the U.K. were subject to tax under Schedule D as "annual profits or gains arising or accruing ... from any trade, profession, employment, or location".

Commissioner of Income Tax (Queensland) v. The Bank of New South Wales (1913), 16 C.L.R. 504 (HC of A.)

A bank issued shares at a premium of £5 per share and for accounting purposes credited the amount of the cash premium received to its profit and loss account. The premium was "not an accretion to any other capital: it has not arisen from the use of any other capital; it is an original sum brought into the general stock of working capital", and was an exempt receipt.

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 67

Higgs v. Olivier (1952), 33 TC 136 (C.A.)

After the filming of Henry V was completed, the film company experienced initial difficulties in promoting the film and determined that it would have even greater difficulties if the taxpayer were to act in other films. Accordingly, the film company paid a lump sum of £15,000 to the taxpayer in consideration for his agreement to give up all film work for an 18-month period. Before finding that this sum was not taxable as "profit or gains arising or accruing" from the taxpayer's profession or vocation as an actor, Sir Evershed M.R. stated (at p. 145) that "according to the ordinary sense profits or gains in order to be taxable must arise or accrue from a profession in the sense that they arise from the exercise of the profession".

Commissioner of Taxation of the Commonwealth of Australia v. Rowe (1995), 60 FCR 99, 95 ATC 4691, [1995] 31 ATR 392.

The taxpayer incurred legal expenses in an inquiry into his conduct and, later, received an ex grati payment from the Queensland government in an amount roughly equivalent to the expenses so incurred by him. In affirming a finding that such receipt was not taxable to the taxpayer, the Court, in a split decision, rejected a submission that there was a general principle of law that an amount paid as compensation for or reimbursement of a deductible expense is income.

Administrative Policy

28 February 2005 External T.I. 2004-0108551E5 - Disability Insurance Through a Professional Assoc.

"Where an insurance policy, including one purchased through a professional association, provides the self-employed taxpayer with a benefit for loss of income earning capacity, such as income disability insurance, it is our view that the premium paid on such a policy is a personal and living expense which is non-deductible. However, benefits received by the taxpayer under such a plan would generally not be included in income for tax purposes."

17 February 2005 External T.I. 2004-010473 -

"Where a Policy, purchased directly from an insurance company or indirectly through a professional association, provides an Individual, carrying on a business or practicing a profession, with a benefit for loss of income-earning capacity, the premium paid on such a Policy by the Individual is a personal or living expense that is not deductible for income tax purposes. Additionally, the receipt of disability benefits under the Policy will not be included in computing the individual's business income."

14 November 2000 External T.I. 2000-005292 -

Damage awards for defamation generally are non-taxable.

1997 Ruling 970913

Damages to be received by a resigning employee in respect of her sexual harassment claim and in respect of a claim for malicious prosecution, malicious investigation, breach of statutory duty, abuse of power, intentional infliction of mental suffering, defamation, injury to reputation, breach of fiduciary duty, negligence, and as reimbursement of legal expenses not incurred in respect of the settlement of the retiring allowance portion of amounts paid to her, would be exempt receipts.

9 September 1994 Memorandum 942195 (C.T.O. "Deductibility of Deep Discounts as Interest and IT-114")

The main concerns respecting IT-114 related to paragraph 3 (respecting whether a discount is interest) and paragraph 29 (respecting whether the amount of a premium is regarded as income).

15 August 1994 T.I. 941280 (C.T.O. "Structured Settlements")

RC has favourably ruled where a casualty insurer has, with the consent of the claimant, assigned all liability under a settlement agreement with the claimant to a third-party insurer with such insurer undertaking to fund its obligations by means of an otherwise qualified structured settlement. The insurer in these circumstances potentially can be an insurer who carries on business outside Canada.

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 61

14 June 1994 Memorandum 941394 (C.T.O. "Voluntary Payments to a Priest")

A retired Catholic priest who is requested by former parishioners to conduct masses on special occasions and, after conducting the mass, may receive voluntary payments from those requesting his services, will be subject to tax on those amounts. While the payments are voluntary, the services provided by him give rise to the payments.

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 53

13 June 1994 T.I. 933513 (C.T.O. "Taxation of Settlement Proceeds")

Damages received from a taxpayer's financial advisors as a result of the overpayment of income taxes attributable to inappropriate advice on their part likely will be a capital receipt. "This view is based on the fact that income tax is not a deductible expense and it would seem to follow that an amount paid to compensate an injured party for such taxes in the circumstances should not be included in income ... ."

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 71

4 February 1993 T.I. (Tax Window, No. 29, p. 20, ¶2435)

Proceeds of an accidental death and dismemberment insurance policy received by a corporation in respect of directors or shareholders will not be included in its income.

29 January 1993 T.I. 9200395 (Tax Window, No. 27, p. 1, ¶2360)

Where a casualty insurer acquires an annuity contract to fund a series of periodic payments to compensate an injured party for lost income and acquires a second annuity contract providing for a series of periodic and balloon payments to fund future medical and personal care expenses with both series of payments having a guarantee period and specified beneficiaries to whom the payments are directed in the event of the injured person's death before the end of the guarantee period, RC will require the first annuity contract to be non-commutable during the guarantee period or the life of the insured person. However, RC will consider it to be acceptable for the second annuity contract to be commutable after the death of the injured person if payments made under the annuity contract after death are directed to the casualty insurer.

22 January 1993 T.I. 9203635 (Tax Window, No. 27, p. 1, ¶2360)

A structured settlement agreement that provides for balloon payments which the injured person can elect in the future to take either as a lump sum or as a further series of periodic payments (whose terms would be determined at the time of making the election) will not comply with IT-365R2 and, therefore, will not be exempt from tax.

12 October 1992 External T.I. 5-922359 -

"The Department's position is that in general a taxpayer should apply generally accepted accounting principles ("GAAP") in determining profit unless a provision of the Act requires a departure from GAAP. In a situation where assistance would be included in income under section 9 of the Act, paragraph 12(1)(x) of the Act would not override that provision to also include the amount in income."

31 July 1992 External T.I. 5-911918 -

Amounts received as guarantee fees ordinarily are taxable on income account.

4 May 1992 TI 920636

Benefits received by the individual partners of a partnership for loss of their income earning capacity under a long-term disability plan would not be included in their income. However, premiums paid by the partnership would be added back to the partnership income at the end of the partnership's fiscal period and included in the income of the particular partners at year end as partnership profit allocation.

16 March 1992 T.I. (Tax Window, No. 18, p. 15, ¶1807)

If a structured settlement meets all the conditions set out in IT-365R2, paragraph 5, the periodic payments received would be accepted as being non-taxable irrespective whether an advance ruling had been obtained.

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 32

11 October 1991 T.I. (Tax Window, No. 11, p. 23, ¶1521)

Disaster relief is not required to be included in the income of a recipient who has no legal entitlement to the relief or who received the relief solely in relation to personal losses. Disaster relief received in respect of a business is treated analogously to insurance roceeds.

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 47

19 and 22 February 1991 T.I. (Tax Window, Prelim. No. 3, p. 14, ¶1124)

RC has recently issued a favourable advance tax ruling concerning a structured settlement that involved the assignment of a settlement agreement.

An annuity issued pursuant to a structured settlement will not meet the requirements of IT-365R2 if a component of the annuity is invested in a variable annuity.

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 49

ATR-40 (18 March 1991) "Structured Settlements"

Description of the non-taxable receipt of periodic payments for damages in a personal injury case.

31 May 1990 T.I. (October 1990 Access Letter, ¶1468)

1% of the price paid to the vendor of a winning lottery ticket under Lotto-Québec would be not taxable to the vendor.

3 May 1989 Directive ASG-89-18 (June 1990 Access Letter, ¶1289)

Third party recipients, including foster parents in group home operators, of social assistance payments must include such payments in income under s. 9 if they are carrying on a business with a view to profit.

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 34

14 December 89 T.I. (May 1990 Access Letter, ¶1201)

Pre-judgment interest received by a taxpayer pursuant to the settlement of a wrongful dismissal action is not included in income.

19 September 89 T.I. (February 1990 Access Letter, ¶1102)

Amounts paid by an insurer under a disability insurance policy are not taxable to the recipient (a business man).

88 C.R. - F.Q.4

Where a self-employed individual travelling on business has claimed a business expense for the cost of an airline ticket under the frequent flyer program which was subsequently used for personal travel, the value of the personal travel is taxable.

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 39

86 C.R. - Q.7

The French Shoes case has not altered the position in IT-359R2, paragraph 9.

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 13

9 November 1981 TI 5-3119

Proceeds received under a key man disability insurance policy (as contrasted to a key man life insurance policy) would not flow into the corporation's capital dividend account under s. 89(1) and would be included in its income.

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Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business 36

Articles

Lewis, "The Taxation of Structured Settlements", British Tax Review, 1994, No. 1, p. 19

A discussion of authorities supporting the position of Inland Revenue that the full amount of payments under a structured settlement are installers of capital and not income.