INCOME TAX |
Income Calculation |
Deductions |
Carter v. Canada
A-6-99
2001 FCA 275, Rothstein J.A.
13/9/01
3 pp.
Appeal from Tax Court decision dismissing appeal from reassessment in respect of 1986 taxation year--Appellant sought to deduct losses of $383,899 arising from hedged investment transactions--Strategy involved transactions in own trading account, and trading accounts of wife, company incorporated--Involvement of wife, company for purposes of income splitting, generating tax losses to himself--If involvement of wife, company ignored, appellant's transactions only resulted in losses--No reasonable expectation of profit from own transactions, no source of income, no basis for deducting expenses--Only way in which hedging strategy could result in profit to consider transaction in combination with transactions by wife, company--Appeal dismissed--In same circumstances in Schultz v. Canada, [1996] 1 F.C. 423 (C.A.), husband, wife taxpayers found to be partners, losses not deductible--For reasons given therein appellant, wife, company partners, losses not deductible--Court not having power to vacate assessment on ground Minister not acting with due dispatch--Under Income Tax Act, s. 220(3.1) Minister may exercise discretion to waive interest--If dissatisfied with Minister's exercise of such discretion, taxpayer may seek judicial review of Minister's decision--Income Tax Act, R.S.C., 1985 (5th Supp.), c. 1, s. 220(3.1) (as enacted by S.C. 1994, c. 7, Sch. II, s. 181; as am. idem. Sch. VIII, s. 127).