When determining whether a loss is deductible, or conversely, whether income is taxable, there must first be a “source of income” or, in other words, a “business”. A business has traditionally been understood to mean anything that occupies the time, attention and labour of a person for the purpose of profit.
Disallowed Deductions / Déductions refusées
Trust Prevented from Going Back on Its CCA Filing
The St. Benedict Catholic Secondary School Trust (the “Trust”) had a leasehold interest in the school bearing its name and surrounding land (class 13 property). From 1997 to 2003, the Trust claimed CCA and triggered non-capital losses (“NCLs”).
There Must Be an Intention to Profit for a Business to Exist
In Canada v. Paletta, the Federal Court of Appeal clarified that, in order for a business to exist, there must be an intention to earn a profit. Absent such intention, there is no business and therefore no “source of income”.
Lending Activity Did Not Possess the Positive Indicia of a “Business”
The appellant was a businessman who made his fortune in the oil and gas industry. In order to fructify his capital, he decided to lend money to third parties. When two companies to which he lent money went bankrupt, he claimed business losses in relation to the loans he made to these two companies.
Question de raisonnabilité
L’arrêt Gervais Auto Inc. c. Agence du revenu du Québec est intéressant parce qu’il revient sur le fardeau de preuve du contribuable lorsque celui-ci fait appel d’une cotisation fiscale.