Credits & Exemptions Etc.

This is an interesting case because it involves promoters of a donation scheme. The couple were happily married when they set up the schemes, but divorced after the schemes fell apart. So this appeal had the interesting feature of being heard on common evidence under ITA s. 174 (common questions). On the donative intent issue, Justice Miller said:  [90]        Notwithstanding the recent… Read More »Mattacchione v. The Queen 2015 TCC 283 (C Miller) — no donation credit, plus gross negligence penalties, where donor-promoter new receipt was for inflated amount

In this decision, Justice Owen gives a masterful analysis of the meaning of “capital gain” and “adventure in the nature of trade”.  This case involved a piece of land donated to the City of Ottawa for a tax credit. The Crown did not object to the tax credit but thought that the disposition should be taxed as business income. On that point, Justice Owen, who disagreed,… Read More »Staltari v. The Queen, 2015 TCC 123 (Owen) – A comprehensive analysis of the distinction between “capital gain” and “adventure in the nature of trade”

Murphy died intestate. His second wife and children fought over the estate. They settled, in part, by the children assigning their interests as designated beneficiaries of an RSP to the wife. Then the children and wife signed a consent order for the provincial court to sanction the settlement. The group then sought to get CRA to accept the transfer to the wife as a “refund… Read More »Murphy Estate v. The Queen 2015 TCC 8 (VA Miller) — Children must disclaim their interests in an RSP for it to past tax-free from an estate to the spouse 

CRA refused to allow the taxpayer to register as a charity. The FCA agreed, relying, in part, on the definition of religion in Syndicat Northcrest v. Amselem, 2004 SCC 47 (CanLII), [2004] 2 S.C.R. 551 at para. 39: “39                              In order to define religious freedom, we must first ask ourselves what we mean by “religion”.  While it is perhaps not possible to define religion precisely, some outer… Read More »Humanics Institute v. Canada (National Revenue), 2014 FCA 265 — You must promote your religion to be a religious charity

This case turned largely on its facts. It offers some good guidance on the importance of impartiality for experts.  The Crown’s expert relied heavily on CRA guidelines so that the court rejected his evidence as impartial. The expert had also made a material error in his assumptions of fact. The court adopted these criteria for deciding when there has been creditable scientific research or experimental development:   “[141]   The… Read More »Abeilles service de conditionnement inc. c. La Reine, 2014 CCI (Jorre) — For SR & ED credits, there must be technical uncertainty and methodical steps to resolve it 

“[11]        However, it is not enough for Mr. Bleiler to demonstrate that people with less severe disabilities suffer prejudice or stereotyping. Mr. Bleiler must also show that the denial of the disability tax credit to those people has the effect of perpetuating that prejudice or disadvantage. The only effect of being denied the disability tax credit that Mr. Bleiler described was the fact that… Read More »Bleiler v. The Queen, 2014 TCC (Graham) – Denial of disability tax credit to persons with less severe handicaps (such as blindness in one eye only) does not breach equality rights under the Charter

Government assistance can reduce tax credits or deductions and it can be included in income (see ITA s. 12(1)(x).)  Here, the FCA agreed with the TCC that a loan “from the Atlantic Canada Opportunities Agency (ACOA) for the tax years 2005, 2006, 2007, and 2008 were “government assistance” pursuant to subsection 127(9) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (the Act). As government assistance, these sums reduce the amount of… Read More »Immunovaccine Technologies Inc. v. Canada, 2014 FCA (Boivin JA)–A government loan you don’t have to repay is “government assistance” that can reduce your credits and deductions

“[22]        The cell phone and CAA membership, while needed by Ms. Olney, are simply not medical expenses under the provisions of the Act.” “[25] …  I have no difficulty in finding that what the personal trainer did, in ensuring Ms. Olney maintained strength in dealing with not having two arms, was a form of treatment of a physical disorder, therapy. What Ms. Olney was receiving was a… Read More »Olney v. The Queen, 2014 TCC 262 (C. Miller)–CAA membership and cell phone are not creditable medical expenses; a personal trainer and clothing alterations may be; house-hunting is not a moving expense

This was a case of two children with learning disabilities.  Doctors gave the necessary positive certificates for the tax credit.  “[8] … Having a positive certificate is not the end of the matter, however. The Court must also be satisfied that the certificate is correct.” After hearing the physicians, Woods J. found one child was impaired, the other was not. “[14]        I agree with… Read More »McDermid v. The Queen, 2014 TCC 264 (Woods)–Disability credit: the physician’s check-the-box form is misleading

You immigrate to Canada.  Your wife dies.  You leave your son at boarding school in India. When your son has school breaks, he stays in India with your sister and brother’s families and your father. In 2012, which was included in the base year in issue, you spent about 10 weeks with your son on two separate visits.   You had set up and regularly… Read More »Jhanji v. The Queen, 2014 TCC Hogan — You don’t necessarily have to live with your child to qualify for the CCTB

Suppose you are lured into a charity scam and you pay 10% of the amount shown on an inflated donation receipt.  Are you entitled to a tax credit for the actual cash value (i.e., the 10%) of your gift?  Yes, says Justice Woods: “[58]        The reasons of the Federal Court of Appeal in Berg confirm that the receipt of a benefit will negate a gift. However, the Court… Read More »David v. The Queen, (2014 TCC Woods) — You are entitled to a donation credit for your actual gift, even if the charity issues you an inflated receipt

If you make a donation of property to a charity at inflated values solely to get tax credits that exceed your out-of-pocket costs, have you made a gift?  No.  Are you entitled to donation tax credits?  No.   Mr. Berg “invested” in a charity scam.  He gave a Canadian charity “Cheder Chabad” offshore time share units for a receipt which was about 10 times his… Read More »Canada v. Berg, (2014 FCA Near) — You can’t get a tax credit that exceeds the true cost of your gift