In a recent Tax Court of Canada decision, Wall v. The Queen, 2019 TCC 168, Visser J. determined that the taxpayer, an experienced real estate developer, was required to include the income from the sales of three Vancouver homes as business income, rather than capital, on his tax returns. In this decision, the Court dealt with other legal issues, including:
whether the taxpayer was liable for gross negligence penalties pursuant to subsection 163(2) of the Income Tax Act, and
whether the Minister was able to reassess the taxpayer beyond the reassessment period, pursuant to subsection 152(4) of the Act.
On the income vs. capital issue, Tax Foresight correctly predicted that these sales should be reported as business income based on several factors unique to the case.
Tax Foresight also correctly predicted that the taxpayer was grossly negligent on his tax return for failing to report the profits from the sales of the homes, and that the Minister could reassess the taxpayer beyond the normal reassessment period.
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Download our report to see a breakdown of how Tax Foresight predicted this case.