A father gifts land worth about $64,000 to his son. The son sells the land back to the father about a week later for $2000. At the time of the transfers, the son owed sales taxes of about $60,000. Was the father liable for the son’s tax debts ETA s. 325(2), based on the below-market non-arm’s length transfer under ? Yes, said Justice Favreau.
One can’t tell from this decision why the father and son went through this arrangement. But definitely, they unnecessarily made the father liable for the son’s tax debts.