Tax Court of Canada


Income tax

Capital gains and losses

Phrase “active business” in section 248(1) of Income Tax Act interpreted broadly

Minister re-assessed taxpayer, disallowing business investment loss of $ 274,114 for 2011 taxation year. Minister contended that taxpayer’s company did not actively carry on business in 2011 taxation year or for twelve months previous. Taxpayer appealed. Appeal allowed. Company was active during twelve months preceding its dissolution, in 2010 and 2011 taxation years, despite having minimal activities. Company remained active only to sell unsold stock of radio communication equipment and parts – Taxpayer maintained website where remaining inventory was posted and responded to e-mails and calls from potential customers, with intention of selling remaining assets -- Phrase “active business” in s. 248(1) of Income Tax Act interpreted broadly so that little that company could do that would make it possible to conclude that it was not being actively carried on.

Hébert c. La Reine (2018), 2018 CarswellNat 1161, 2018 CCI 48, Sylvain Ouimet J. (T.C.C. [Informal Procedure]).

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