Two separated spouses share custody of their child, with neither paying support, and neither having remarried. Of whom is the child an eligible dependant? CRA responded:
[I]t is necessary to determine with whom the child resides on December 31 of the taxation year. If the child resides with the individual and meets all the other criteria in the definition of "eligible dependant", then the individual must claim the “family” WITB.
Fyfe v. The Queen, 2022 CCI 20
The taxpayer spent approximately six months per year doing construction, repair and other work for a friend, and the balance of the year sailing in the Bahamas. He reported annual income (of around $11,000) that was just below the level at which the Working Income Tax Benefit (“WITB”) began to be reduced. He kept no business records. The taxpayer was assessed (and the Crown’s pleadings asserted) that the WITB should be denied on the basis that the income declared by the taxpayer was not from a business. In finding that the taxpayer was entitled to his WITB claims, Masse DJ stated (at para. 44, TaxInterpretations translation):
Although he was only carrying on a small business and only for 6 months of the year and had essentially only one client, this does not mean that he was not carrying on a business. The appellant's testimony is corroborated by his client, Mr. Huet, and I accept their testimony.
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|Tax Topics - Income Tax Act - Section 3 - Paragraph 3(a) - Business Source/Reasonable Expectation of Profit||small seasonal business with one client was still a business||148|