Cases
Highway Sawmills Limited v. Minister of National Revenue, 66 DTC 5116, [1966] CTC 150, [1966] S.C.R. 384
Cartwright J. found that "the phrase 'timber limits' describes a parcel of land with merchantable timber standing upon it" (p. 5120), rather than being restricted to the timber thereon. Accordingly, a sale of land by the taxpayer following the removal of the timber thereon gave rise to recapture of depreciation rather than a tax-free capital gain.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Statutory Interpretation - Scheme | 114 |
Administrative Policy
21 May 2014 External T.I. 2014-0528021E5 - Classification of Timber Limits
Standing timber is harvested and the land is subsequently disposed of at a gain. CRA stated:
Generally a right not categorized as a "timber resource property" will be a timber limit. As well, timber limits are created where the right to cut timber cannot reasonably be regarded as being a right that is renewable or replaceable. Timber limits usually include, among others, the right to cut which arises from the ownership of private land with timber. …
[T]he cost of land with standing timber characterized as a timber limit would be more appropriately included in Schedule VI rather than under Class 15 of Schedule IV… .[A]n amount equal to the lesser of the proceeds of disposition and the capital cost of the property will reduce the UCC of the property prior to the disposition and will result in a recapture of CCA where the reduction results in a negative amount of UCC. The recapture has to be fully included in income as per subsection 13(1)… .[A]ny excess of the proceeds of disposition of the land over the capital cost of the property will be treated as a capital gain pursuant to subsection 39(1)… .
4 August 1995 External T.I. 9513565 - DEPLETION ALLOWANCE ON U.S. TIMBER PROPERTY
There is no requirement in Regulation 1100(1)(e) and Schedule VI that a timber limit be located in Canada.
Section 1
Paragraph 1(a)
Subparagraph 1(a)(i)
Administrative Policy
1 September 1999 External T.I. 9901805 F - CONCESSION FORESTIERE
In the context of various private woodlots having had a large number of trees damaged in the January 1998 ice storm, so that it was highly unlikely that they could be recovered for sale, the Directorate indicated that the term "merchantable timber" was generally interpreted as referring to marketable trees, i.e., trees “whose size, quality, and appearance made them marketable under given economic conditions.”
Additionally, it is timber from cut trees that eventually will be sold that should be considered for purposes of determining the volume of timber cut (by cord, board foot, or cubic metre cut) in s. 1(a)(i).
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Schedules - Schedule VI - Section 5 | merchantable timber refers to marketable trees | 111 |
| Tax Topics - Income Tax Regulations - Schedules - Schedule VI - Section 2 - Paragraph 2(b) | timber that is measured is merchantable timber | 44 |
Section 2
Paragraph 2(b)
Administrative Policy
1 September 1999 External T.I. 9901805 F - CONCESSION FORESTIERE
The “quantity of timber in the limit” referred to in s. 2(b) referred to merchantable timber, (i.e., marketable trees), whose quantity was to be determined by a survey for purposes of s. 2(b), which would indicate the quantity of merchantable timber.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Schedules - Schedule VI - Section 5 | merchantable timber refers to marketable trees | 111 |
| Tax Topics - Income Tax Regulations - Schedules - Schedule VI - Section 1 - Paragraph 1(a) - Subparagraph 1(a)(i) | only timber from cut trees that will eventually be sold is taken into account | 105 |
Section 5
Administrative Policy
1 September 1999 External T.I. 9901805 F - CONCESSION FORESTIERE
In the context of various private woodlots having had a large number of trees damaged in the January 1998 ice storm, so that it was highly unlikely that they could be recovered for sale, the Directorate indicated that the term "merchantable timber" was generally interpreted as referring to marketable trees, i.e., trees “whose size, quality, and appearance made them marketable under given economic conditions.”
Furthermore, the “quantity of timber in the limit” referred to in s. 2(b) referred to merchantable timber, (i.e., marketable trees), whose quantity was to be determined by a survey for purposes of s. 2(b), which would indicate the quantity of merchantable timber.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Schedules - Schedule VI - Section 1 - Paragraph 1(a) - Subparagraph 1(a)(i) | only timber from cut trees that will eventually be sold is taken into account | 105 |
| Tax Topics - Income Tax Regulations - Schedules - Schedule VI - Section 2 - Paragraph 2(b) | timber that is measured is merchantable timber | 44 |