Cases
Darling v. Canada (Attorney General), 2003 DTC 5489, 2003 FCA 282 (FCA)
The taxpayer and his brother established a partnership to acquire a real estate investment and received $15,000 from each of 19 potential limited...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense | 65 |
McNeill v. The Queen, 2000 DTC 6211 (FCA)
Damages paid by the taxpayer as a result of breaching a non-compete covenant were deductible. Rothstein J.A. found that the analysis in 65302...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose | damages from contractual breach were deductible | 154 |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Timing | 102 | |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Loss v. Loss - Damages | damages incurred to keep clients were deductible | 122 |
Vanguard Trailers Ltd. v. The Queen, 80 DTC 6001, [1980] CTC 42 (FCTD)
A payment of $250,000 made by the plaintiff to the chief executive officer of its U.S. parent, in settlement of a threatened action by him against...
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| Tax Topics - General Concepts - Evidence | 69 |
See Also
102751 Canada Inc. v. Agence du revenu du Québec, 2019 QCCQ 7378, aff'd 2021 QCCA 605
The taxpayer (Mobile), which was owned by the Waibel family in Europe, sold its two Toronto properties in 2002 and 2003 for $7.3 million, with...
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| Tax Topics - Income Tax Act - Section 169 - Subsection 169(1) | written protocol for appeal was equivalent of notice of objection | 374 |
ZR v. The Queen, 2007 DTC 1577, 2007 TCC 598
The taxpayer was permitted to deduct as a business loss amounts paid by her in settlement of claims brought by a franchisor against her bankrupt...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose | 147 |
Administrative Policy
9 June 2005 Internal T.I. 2004-0105421I7 F - Déductibilité des frais juridiques et d'intérêts
The taxpayer, who had contracted with a construction firm for the firm to enlarge the taxpayer’s building, failed to pay invoices of the firm...
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| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A | legal fees to defend against claim for unpaid construction fees on building addition were not a capital cost addition | 127 |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(ii) | interest paid pursuant to a judgment requiring payment of construction fees would be deductible but for s. 18(3.1) | 165 |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(3.1) | interest paid pursuant to a judgment requiring payment of construction fees would be capitalized to the construction costs to the extent of accrual during construction period | 165 |
14 September 2004 Internal T.I. 2004-0080911I7 - Swap-termination payments
The CRA position that all amounts payable or receivable pursuant to an interest rate swap agreement (including a termination payment) will be...
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| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Swaps | interest rate swap termination payment on income account | 72 |
IT-467R2 "Damages, Settlements and Similar Payments"
A payment for damages will usually be on account of capital if the payment creates an enduring benefit or it preserves or protects a capital asset.
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Damages | deductibility assessed at time of conduct | 69 |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Contract or Option Cancellation | 74 |
Articles
Joel A. Nitikman, "Taxability and Deductibility of Judgments and Awards", 1991 British Columbia Tax Conference, Volume 1.
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| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | 0 |