Cases
Canada v. Zelinski, 2000 DTC 6001 (FCA)
The taxpayers purchased numerous paintings of Morrisseau - initially because of the advantageous price and, later, in greater volume after they...
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| Tax Topics - Income Tax Act - Section 161 - Subsection 161(1) | 108 | |
| Tax Topics - Income Tax Act - Section 39 - Subsection 39(1) - Paragraph 39(1)(a) - Subparagraph 39(1)(a)(i.1) | 212 |
The Queen v. Mel-Bar Ranches, 89 DTC 5189, [1989] 1 CTC 360 (FCTD)
$291,134, which a farmer received pursuant to an agreement whose "essential purpose" was for the felling and removal of all usable timber on a...
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| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(g) | 90 |
Armstrong v. The Queen, 85 DTC 5396, [1985] 2 CTC 179 (FCTD)
It was held that a thoroughbred racing horse had not been bought by the taxpayer with a view to its eventual sale, and its sale three years later...
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| Tax Topics - General Concepts - Evidence | 51 |
Westcon Engineering and Contractors Ltd. v. The Queen, 77 DTC 5398, [1977] CTC 567 (FCTD)
After a corporate jet leased by the taxpayer ceased to be useful to it, it located a purchaser, exercised a purchase option contained in the lease...
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| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Options | 97 |
Doyle v. MNR, 70 DTC 6251, [1970] CTC 365 (Ex.Ct.), briefly aff'd 78 DTC 6027, [1978] CTC 530, 1 S.C.R. 547
Equipment was purchased by a syndicate whose purpose was to resell the equipment at a substantial gain to a known purchaser. When the purchaser...
Orlando v. The Minister of National Revenue, 62 DTC 1064, [1962] CTC 108, [1962] S.C.R. 261
The chief source of income of the taxpayer from farm land which she held in Scarborough was the sale in most of the years from 1945 to 1952 of...
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| Tax Topics - Income Tax Act - Section 111 - Subsection 111(5) - Paragraph 111(5)(a) | 74 |
Frankel Corporation Ltd. v. Minister of National Revenue, 59 DTC 1161, [1959] CTC 244, [1959] S.C.R. 713
The taxpayer, which was engaged in dealing in scrap metals, smelting and refining non-ferrous metals, and in carrying on a wrecking and salvage...
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| Tax Topics - Income Tax Act - Section 111 - Subsection 111(5) - Paragraph 111(5)(a) | 130 |
MNR v. Taylor, 56 DTC 1125, [1956] CTC 189 (Ex Ct)
Because the parent corporation of the taxpayer's employer ("Canada Metal") prohibited Canada Metal from dealing in futures or purchasing lead...
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Business | purchase of large quantity of lead for resale was an adventure | 127 |
Atlantic Sugar Refineries v. Minister of National Revenue, 49 DTC 602, [1949] S.C.R. 706
The taxpayer, whose business was purchasing, refining and selling sugar, purchased 15,000 tons of raw sugar at elevated prices due to the outbreak...
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| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Futures/Forwards/Hedges | short sale of sugar futures for business hedging on income account | 205 |
See Also
Wright v. The Queen, 2003 DTC 763 (TCC)
The taxpayers and their father had used 430 acres of a 5,700 acre property in Manitoba for farming for many years before farming ceased in the...
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| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(g) | not applicable to one-time sale | 181 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Business | 122 |
Pustina v. The Queen, 96 DTC 1594, [1996] 3 CTC 2542 (TCC)
In finding that the taxpayers (three lawyers) had acquired various paintings by Morrisseau on capital account, Mogan TCJ. stated (at p....
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| Tax Topics - General Concepts - Fair Market Value - Other | 119 | |
| Tax Topics - Income Tax Act - 101-110 - Section 110.1 - Subsection 110.1(1) - Paragraph 110.1(1)(a) | 38 |
Wain v. Cameron, [1995] BTC 299 (Ch. D.)
A sale by the taxpayer (who was an author as well as a professor) of his working papers, notebooks, drafts and memorabilia (but not of any...
Harms v. MNR, 84 DTC 1666, [1984] CTC 2714 (TCC)
The taxpayer, who carried on an accountancy practice but also traded in corn, wheat, gold and cotton futures, purchased gold bars and coins in...
Wisdom v. Chamberlain (1968), 45 TC 92 (C.A.)
On the advice of his accountant the taxpayer used borrowed money to purchase £200,000 worth of silver, with a right to put the silver back to the...
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Business | 112 |
Commissioners of Inland Revenue v. Fraser (1942), 24 TC 498 (Ct. of Ses. (First Div.))
The taxpayer, who had no previous dealings in whisky and none afterwards, and no special knowledge of the whisky trade, purchased whisky in bond...
Rutledge v. Commissioners of Inland Revenue (1929), 14 TC 490 (Ct. of Ses. (First Div.))
The taxpayer, a businessman with many interests (lending money, the film business, and dealing in real property) happened to be in Berlin in...
Doughty v. Commissioner of Taxes, [1927] AC 327 (PC)
On the formation of a partnership, the excess of the nominal value of the shares issued over the net book value of the assets transferred was...
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| Tax Topics - General Concepts - Evidence | step up in recorded carrying value not profit | 131 |
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Goodwill | sale of whole concern is on capital account | 134 |
Administrative Policy
S4-F14-C1 - Artists and Writers
Gift by its artistic creator can be of capital property if it was created without resale intention
1.82 When a visual artist creates a work of art...
23 December 2013 Internal T.I. 2013-0514701I7 - Bitcoins
Question. "Given the enormous appreciation of the [Bitcoin] currency - how does Capital Gains tax apply?" CRA response:
The determination of the...
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| Tax Topics - Excise Tax Act - Section 153 - Subsection 153(1) | sale for Bitcoins | 110 |
| Tax Topics - Income Tax Act - Section 9 - Computation of Profit | sale for Bitcoins | 66 |
Example
Mr. X bought a Bitcoin on June 1, 2013 for $100. Mr. X then sold the Bitcoin on December 1, 2013 for $500. Based on his particular facts and...
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| Tax Topics - Income Tax Act - Section 214 - Subsection 214(16) | 140 | |
| Tax Topics - Income Tax Act - Section 9 - Computation of Profit | 38 |
5 November 2013 CRA Press Release "What you should know about digital currency"
Digital currency is virtual money that can be used to buy and sell goods or services on the Internet. Bitcoins are an example of digital...
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| Tax Topics - Income Tax Act - Section 9 - Computation of Profit | 71 |
10 July 2012 Internal T.I. 2011-0418541I7 - XXXXXXXXXX hedges
Canco acquired FCo, a non-resident corporation. Canco did not directly hold reserves or production assets, but had a head office in Canada with...
25 February 2011 External T.I. 2011-0392061E5 - Commodities and mutual Funds
A mutual fund's gains and losses from transactions in commodities futures are generally considered to be derived from adventures in the nature of...
7 April 2005 External T.I. 2004-0099191E5 F - Inventaire d'un artiste
CRA indicated that inventory of an artist acquired on the artist’s death would generally be disposed of by the legatee on capital account.
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| Tax Topics - Income Tax Act - Section 10 - Subsection 10(6) | reporting nil inventory on T2124 form is treated as making the election | 82 |
| Tax Topics - Income Tax Act - Section 70 - Subsection 70(2) | application of s. 70(2) or (3) to artist’s inventory | 219 |
16 December 2004 External T.I. 2004-008197
Respecting a mutual fund that purchased precious metals to be physically held by it in its vaults in the expectation of long-term appreciation,...
16 May 1996 Internal T.I. 9616950 - SALE OF TIMBER FROM PRIVATE LAND
Whether a contract relating to disposal of timber constitutes a sale of chattels, or constitutes a grant of an interest in land or a licence...
21 April 1995 External T.I. 9509865 - CAPITAL GAINS ELECTION -- STANDING TIMBER
Because standing timber normally is not an asset distinct from the land on which it stands, an individual owning the underlying real property can...
6 September 1994 External T.I. 9412945 - TRANSACTIONS IN COMMODITIES BY MUTUAL FUND TRUSTS
RC is "of the opinion that gains and losses resulting from transactions in commodities by mutual fund trusts are, generally, considered to be...
23 February 1994 Internal T.I. 9402106 - CLASSIFICATION OF LEASED ASSETS
Generally, it is RC's position that a property subject to a long term lease is capital property.
11 January 1994 External T.I. 5-9325855
A taxpayer purchases gold on the spot market and simultaneously sells it forward for an amount which exceeds his cost, thus locking in a gain. Is...
2 September 1992 Memorandum (Tax Window, No. 24, p. 17, ¶2222)
Proceeds received by land owners from the sale of logs and wood products are included in their income. However, where the removal of trees is...
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| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(g) | 33 |
13 May 1992 Internal T.I. 7-921151
Fluctuations in the amount of the liability of gold producers for gold loans are on income account.
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| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(a) | 21 | |
| Tax Topics - Income Tax Act - Section 9 - Timing | 33 |
IT-373R "Farm Woodlots and Tree Farms"
"Amounts received (whether in a lump sum or on a stumpage basis) for permitting other persons to remove standing trees from the woodlot are...
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| Tax Topics - Income Tax Act - Section 43 - Subsection 43(1) | 41 |
IT-346R "Commodity Futures and Certain Commodities"
3. For taxpayers who take futures positions in, or who have transactions in, commodities connected with their business as part of their business...
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| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) | 34 |
Commentary
Commodities such as lead (see Taylor) and toilet paper (see Rutledge, and see also Fraser) are by their nature not of an investment character, so...